I registered just to ask this question. Why da phuck is he still printing it OBVIUOSLY doesnt work…
I registered for the same reason.
That is the built-in arbitrage function of the Terra-Luna ecosystem at play. Luna’s function is to restore the UST (Terra) peg when it de-pegs by creating an arbitrage opportunity whereby UST can be burned for an amount of LUNA equal to the peg amount (UST = 1USD), and NOT the actual de-pegged amount. This Luna then can be sold for the pegged amount.
As the value of LUNA drops, much more LUNA is minted from each burned UST that then inflates LUNA’s supply, thereby decreasing value of LUNA which means that even more LUNA is minted for each UST burned.
This burning of UST is meant to reduce the supply of UST, thereby increasing its value, and restoring the peg.
However, if an attacker has a high enough volume of UST, this mechanism to restore the peg can be thwarted and thereby exploited for gain. It is not just the attacker that benefits, anyone with access to UST and the LUNA/UST pair can join in and loot LUNA.