Can we stop the MIM/UST printing press for a moment? Serious question

I know it’s awesome to see how many Luna get’s burned every day, hour, minute, but let’s take a step back for a moment and look at the big picture.

Anchor is at the moment the key driver for UST, it’s 20% stable yield is the best advertising to bring the masses to the Terra ecosystem and UST.

There’s no denying that Anchor is delivering massive opportunities as well for other dapps across Terra which ultimately will bring more visibility, for developers, more advanced defi users that will make some of them Terra ambassador just like any of many old lunatics here.

We keep criticizing the FED and money printing, I know this is somehow different, but at the same time we might snowball into a bit problem for Luna and Terra ecosystem as a whole.

Anchor team as Do, I’m pretty sure they know that Anchor has their limits and they know more than anyone what to do when they get there, but I would love to hear from Terra how sustainable is this UST/MIM minting to make use of Anchor deposit rate of 20%.

Again, I would love to see more organic growth on the Terra ecosystem that drives UST, also UST being use on more Exchanges (which I believe Do is working on this) as well have UST on vaults that give yield from their own incentive protocol and or fees instead of looping onto Anchor.

This is not to sound critic to Do or any of the Terra team members, they are doing awesome job, even I must confess, I was refreshing the Smart Stake page to show the burn happen more time than I would like to admit :blush:

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We keep criticizing the FED and money printing, I know this is somehow different, but at the same time we might snowball into a bit problem for Luna and Terra ecosystem as a whole.

It is somehow different - our “money printing” is not achieved by debt, at least not on the Terra side, purchasers of UST may of course be going into debt to buy them, especially if they have access to 0% “free money” from the Fed :slight_smile:

So I’m curious what “bit problem for Luna and Terra ecosystem” you are thinking this would cause?

To me it does seem a legit way to get UST used more places without actually trying a top-down approach of buying our way into exchanges like Binance. If UST is all over the place in DEXs and other yield sources eventually it will percolate up to exchanges from the bottom up. If we eventually get to the stable coin #3 spot ahead then exchanges and on-ramps will surely cave in and provide access to it.

That said, you’ve made me curious - has someone attempted a break down of where UST is deployed these days? Reserves, exchanges, DEXs, personal wallets, other?

Well, aren’t they burning their own Luna to better the ecosystem? We just need to be patient to see how they deliver Ozone. If for some reason Ozone doesn’t do well, we as the community could vote to better it as well. I’d say let TFL do what they do best.

A breakdown of UST deployment would be good though, I agree with @O1O1O1O

no problem is retards like u who want to control everything and cant let things be

What I’m saying is not that the increase of UST printing is bad I’m just saying that the way has been going might pose risks to the overall terra ecosystem, I’m more trying to debate the MIM-UST infinity minting making use of what is not sustainable levels of ANC deposits via this strategy.

When I first created this topic, the reserves were starting to go down… now it’s dropping quite significantly considering the drop of borrowing (partly due to the liquidations that happen due to the bug).
This printing just exacerbated the gab between the ANC deposits vs Borrowing. I would hope to see at least slow down a bit for the borrowers to catch up to a more sustainable level.

Risks? Let’s say the MIM-UST infinity loop breaks and all these newly minted UST find their way back… What kind of cascade critical effects would do to the overall Terra ecosystem?

  • Luna would come crashing down
  • Anc would loose even more borrowers as more people get liquidated and their borrowing power is lower
  • UST, with the massive selling pressure might de peg leading to more uncertainty around it.

Again, I’m just looking at worse case scenario, which I would like to see more constructive discussions around it.
It’s true that having UST above DAI, gives UST more recognition and perhaps make more CEX adopt it.

So, to @Cristina_Fernandez that doesn’t know how to respect some else concerns, feel free to let us all know her vision of UST (still at it’s infancy) if MIM-UST breaks ANCHOR and or drives a massive selling of UST one day it stops working.

Wouldn’t be better to be more diversified?

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The Anchor yield reserves started to see a relatively sharp reduction as of 10 days ago on 12/10, after seeing steady daily increases every day for the prior 20 days.

During 12/10-12/20 we lost ~$2.9 million dollars, going from $78.9m to $76m. If we continue on this same trajectory we will run out of yield reserves in about 262 days.

I have no idea if the UST-MIM strategy is the primary cause of this as this also happens to roughly coincide with the wrongful liquidations that took place on Dec. 9, but does seem like a deeper look is warranted into what the cause actually is. Perhaps someone who is working on Anchor can add some insight.

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Guys, take it easy, TFL will step in to save the day if/when necessary. I can imagine that Do is very confident for a reason, he has a clear overall plan that goes well beyond what we can foresee, and the partnership with Daniele is part of it, after all TFL has 485m LUNA available to sustain the ecosystem growth. 70m UST out of the 75m currently in the yield reserve were injected back in july from the stability fund. Deposit APY will dynamically adjust before that in any case, it’s now been lowered from 19.5% to 18%.

I’m not the worrying about shit I am not involved with type tbh, I get why people are like “but what happens if” and “shouldn’t someone be telling us something” but the way I see it I’m not employed or paid by TFL to take those concerns onboard… they have guys there Do included who deal with all that shit… I’m happy to let them crack on and do what they do & tbf they have been pretty fucking good at it up to this point. Prolly why they get paid “the big bucks” I guess…

But I get why some people are “but what if” I can imagine it keeps them up at night?? the collapse of their financial world… lol :wink:

When we have like 15mill left drop a post in here, I have notification on… just so I can withdraw. Cheers. :slight_smile:

I think this is a fair discussion that is worth talking about. The yield reserve was doing great for a little while after bETH collateral was added to Borrow and the incentives for Borrow were high, and it does seem a little odd to suddenly see it falling by millions - now at 72m. I have seen multiple discussions on Twitter by others who have noticed, some with the opinion that it’s related to the MIM UST strategy. I personally don’t know… and even though I am not currently using the Earn feature of Anchor I would want to see it flourish as it was designed to, and become self sustaining, for many reasons (including a big F u to the world’s traditional banks, and for the love of innovation). Anyway - I’d like to hear more, if anyone has more data or if someone more knowledgable can also add in to this conversation that would be awesome… :slight_smile:

I agree.

The race to 10b Mkt cap has been fantastic for in terms of market signal, Luna burn, network fees.

However, the anchor yield reserve needs to be protected at all cost. And too much degen box could cost the ecosystem dearly in case of deleveraging.

Like you, I prefer an organic growth of UST from dApps, use cases and sticky money. This is where Luna/Terra is different from other L1s and the reason why Luna is such a special asset.

100% this. I’m concerned we’re seeing this play out in realtime unless their is an intervention of some sort. Lots of discussion over in Anchor.