All news

Will Terra’s LUNA exceed $88 this time next year? There’s a $1m bet riding on it

Posted on by admin
arm wrestling 567950 1920 1200x600 1
15
Mar
  • The founder of Terra Do Kwon has placed a $1 million wager with a renowned crypto trader on whether LUNA will be trading above $88 by this time next year.
  • The bet, managed in an escrow wallet by podcaster Cobie, is riding on whether the algorithmic pricing of the UST stablecoin vs LUNA is sustainable in the long term.

How high do you think the price of Terra’s native token LUNA will soar by this time next year? Are you willing to bet $1 million on your convictions? Well, there are two people who were more than happy to. Terra founder Do Kwon placed a $1 million wager with a renowned crypto trader on whether the price of LUNA will top $88 by this time next year.

At press time, the crypto trades at $90.85, up 12 percent in the past week. As CNF reported a week ago, it was one of the biggest gainers from the announcement that Biden would sign an executive order on crypto. It shot up by 21 percent on the day to trade at $104. It has lost some of this value as overall momentum in crypto slowed down.

LUNAUSD 2022 03 15 16 28 05

As with most things in crypto, it all started on Twitter. Renowned crypto trader Sensei Algod dared anyone who believes LUNA will be higher in one year than it is now to place $1 million where his mouth is.

Do Kwon, the CEO of Terraform Labs, which is the firm behind Terra, was more than happy to accept the wager. Each placed $1 million in an Ethereum address under the stewardship of crypto podcaster Jordan Fish, better known to his fans as Cobie.

Under the terms of the bet, should LUNA trade below $88 by this time next year, Sensei wins and vice versa.

Sensei has been a big critic of LUNA for some time now. In a Monday Twitter thread, he broke down why he believes that the project is a scam and will be the “Bitconnnect of this bull run.”

The Terra ecosystem has LUNA, the native token and UST, the native stablecoin, with 1 UST being redeemable for $1 worth of LUNA.

Basically, if the price of UST dips below the $1 mark, an arbitrage opportunity arises and as traders take advantage of it, the price levels back to $1. The same happens if it goes above $1 as traders short it.

Sensei believes this model is plainly unsustainable and will capitulate before this time next year, leading to a spectacular dip in price for LUNA.

He noted:

So basically 11.7bn UST is basically backed by luna order books, in the best case, it can maybe sustain a 1-2bn sell right now. For now, they have driven up demand with the 20% fixed apy printed out of thin air which is unsustainable.

He accused LUNA fans of deceiving themselves that “demand will infinitely keep exceeding supply. The moment supply exceeds demand people will panic and start mass redeeming UST for LUNA. Does this remind you of something? (cough cough Ponzi).”

Related: Terra (LUNA) eyes top position in staked value after overtaking Ethereum, Solana still ahead

There is one positive outcome – aside from the entertainment that the bet is set to present in a year’s time. Do Kwon said that regardless of the outcome, he will donate $1 million to Angel Protocol, a Terra-based protocol for creating perpetual charity endowments. He’ll also buy $1 million in Terra altcoins and burn them at a time like this next year.

admin