Terra and Luna ecosystem is a DeFi Scam, LUNA/UST is emblematic of all DeFi world. This is the main outline of what Max Keiser, a well known Bitcoin enthusiast, said about the epic stablecoin crash.
On May 9th, 2022, Terra made international headlines after its stable coin, UST lost its peg to a dollar. The fear that followed resulted in the massive withdrawal of the validator’s stakes. The network started to mint LUNA token to sustain the falling UST.
This led to a enormous inflation, which in turn brought down the LUNA itself.
Terra ecosystem collapsing on May 10th. Both Terra and LUNA lost 99 percent of their value in just 48 hours.
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.
The reaction of the crypto market leaders was ferocious, both to the Terra ecosystem and to its leader Do Kwon and his actions amid the crisis. Some of them even called Do Kwon a degenerate gambler.
Now its turn of the renowned economists to speak.
Terra/Luna is a scam?
Max Keiser, a prominent Bitcoin enthusiast, has responded to Joe Weisenthal, a Bloomberg economic news host, who termed UST/LUNA a “egregious example of Ponzi-like games” in a tweet.
Weisenthal in his tweets claimed that despite being the “greatest thing in crypto” for the previous couple of years, decentralized banking apps had had a little economic impact. And Weisenthal also responded to a popular opinion that things that happened to Luna are not inherent to all the cryptocurrencies.
Not only does Keiser agree that Terra and Luna were a scam. He also called out Ethereum and the whole DeFi world, and even Mike Novogratz, accusing them of being scammers.
Here is a nice moment to remind that billionaire Mike Novogratz was hyping for Luna for years. He even made a tattoo with LUNA symbol. Being one of the evangelists, Novogratz is responsible for Terra and Luna scam, many people claim now.
Keiser 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.