If you don’t know where the yield is coming from, you are the yield


As per title, know where the yield is coming from before investing in a project, I’ve been seeing a lot of threads like this of people claiming to be victims of ust without taking themselves accountable


People here claiming that they put money in ust as their native currency is unstable, well why don’t you put your money into other usd stablecoin, there’s literally so many of them, the reason you put it into ust is because you wanted that high yield, there’s no other reason why you choose ust over usd stable otherwise

Now how does investing in usd make you the yield

When there is a strong buy pressure on ust, it will push ust slightly above peg and make it profitable for arbitragers to buy luna, burn, redeem, sell ust to make a profit. Therefore, strong buy pressure on ust increase demand for luna and thereby increases its price

Now, where does yield from anchor comes from. They come from TFL selling luna in its reserve to the market in exchange for ust. The higher luna price the lower the amount of luna in the reserve needs to be sold hence the ponzi can be keep alive for longer

So by buying ust, you’re increasing luna price, which is where you yield comes from, so buying ust make you the yield and thus the crash

Furthermore, even if your goal is to keep usd as your native currency is unstable, you should keep them in a basket of usd stables instead of relying solely on 1

So yeah, sucks to lose your money, but when you don’t know that you are the yield, it is very easy to lose it

submitted by /u/ln28909
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