Terraform Labs CEO Do Kwon accepted a challenge from the user nickname Sensei Algod regarding prospects of LUNA, the Terra protocol’s native token, used for staking, governance and collateral for the network’s algorithmic stablecoins. Do Kwon is willing to lose $1 million if the asset loses value in a year. The bet soon rose to $11 million.
At the time of the bet, LUNA was trading at $88. Do Kwon would win if the weighted average price of the asset as of March 14, 2023 was above that value.
Do Kwon also agreed to increase the bet to $10 million on the same terms in a dispute with a trader nicknamed GiganticRebirth. As of this writing, the Terraform Labs CEO has not had time to confirm it with cash.
UST maintains its $1 peg by burning LUNA tokens to issue “stablecoins.” In times of high demand, this process takes on a large scale. According to critics such as Sensei Algod, this approach could lead to a dramatic drop in LUNA’s price and a loss of UST’s algorithm-driven peg to $1.
Kwon has promised that regardless of the outcome of his bet with Sensei Algod, he will donate $1 million to charity at @handleprotocol and allocate a similar amount to buy Terra ecosystem tokens and then burn them.
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