Terra Foundation Created 'Death Spiral' on Its Own Stablecoin, According to Willy Woo

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Terra Foundation Created 'Death Spiral' on Its Own Stablecoin, According to Willy Woo
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'Death spiral' for $UST and $LUNA was launched by the foundation that is supposed to protect it

But the reality is not even close to what should have happened on paper. Luna Foundation Guard held billions worth of BTC that it immediately dumped on the bleeding market, creating a horror show for market makers and investors.

The additional selling pressure from LFG caused a crash in BTC, which in turn dragged the entire market with it, including LUNA. With rising Bitcoin dominance on the market, Luna continued its fall, which practically meant entrance into a death spiral in which LFG had to sell moreWoo's point was that LFG's actions were counterintuitive and sped up the de-peg because of LUNA's backing mechanism.

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