Terra is a DeFi Scam! LUNA/UST Is Emblematic Of All DeFi

Photo of Nidhi Kolhapur

On May 9th, 2022, Terra (LUNA) made international headlines after its stable coin, UST lost its peg for the second time in two days. The fear that followed resulted in the Terra ecosystem collapsing on May 10th. Terra has lost 99 percent of its value in just 48 hours.

The crypto community has been outraged by the collapse of Terra’s LUNA pricing and algorithmic stablecoin TerraUSD (UST). When the market value of LUNA and UST declined in less than a week, institutional and ordinary investors incurred enormous losses. When both Terra’s LUNA price and UST price fell within a week, the crypto community experienced the first “crypto bank run” in history, wiping out roughly $39.2 billion in market value.

“Keiser calls out LUNA”

Max Keiser, a prominent Bitcoin enthusiast, has responded to Joe Weisenthal, a Bloomberg economic news host, and co-host of the Odd Lots podcast, who termed UST/LUNA a “egregious example of Ponzi-like games” in a tweet.

Keiser also called out LUNA, DeFi, Ethereum, and even Mike Novogratz, accusing them of being scammers.

Despite being the “greatest thing in crypto” for the previous couple of years, Weisenthal claimed that decentralized banking apps had had a little economic impact. In response to Jake Chervinsky, the Blockchain Association’s head of policy, he tweeted that.

On Twitter, Chervinksy expressed his dissatisfaction with the anti-crypto media’s harsh criticism of LUNA, claiming that all crypto is possibly similar to LUNA/UST.

He believes that Uniswap and other AMM (automated market maker protocols) have the potential to become commercially significant in the future.

Max Keiser, an economist who hosts his own show on RT about finance and Bitcoin, tweeted to Weisenthal that he agreed that DeFi is a scam and a Ponzi scheme (based on which their yield-farming mechanisms operate, as per his tweet). LUNA and Terra’s UST stablecoin have been dubbed “emblematic of all DeFi” by Keiser.

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