Designed to fail: terra and the limits of arbitrage
Speculative ‘attack’ exposed fundamental flaws in crypto’s algorithmic stabilisation mechanism
Perhaps the most shocking thing about the collapse of terraUSD this month was how many people saw it coming. Most crypto investors blame the stablecoin’s failure on a targeted attack by speculators, akin to how George Soros ‘broke’ the pound in 1992. While the assault was a surprise, to many in the industry the collapse was inevitable.
TerraUSD, commonly referred to as UST, and its sister token
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