- The founder of Terra Do Kwon has placed a $1 million wager with a renowned crypto trader on whether LUNA will be trading above $88 by this time next year.
- The bet, managed in an escrow wallet by podcaster Cobie, is riding on whether the algorithmic pricing of the UST stablecoin vs LUNA is sustainable in the long term.
How high do you think the price of Terra’s native token LUNA will soar by this time next year? Are you willing to bet $1 million on your convictions? Well, there are two people who were more than happy to. Terra founder Do Kwon placed a $1 million wager with a renowned crypto trader on whether the price of LUNA will top $88 by this time next year.
At press time, the crypto trades at $90.85, up 12 percent in the past week. As CNF reported a week ago, it was one of the biggest gainers from the announcement that Biden would sign an executive order on crypto. It shot up by 21 percent on the day to trade at $104. It has lost some of this value as overall momentum in crypto slowed down.
As with most things in crypto, it all started on Twitter. Renowned crypto trader Sensei Algod dared anyone who believes LUNA will be higher in one year than it is now to place $1 million where his mouth is.
Edited*
Who wants to take a $1000000 bet that $luna will be lower price in 1 year than now? @stablekwon @CryptoHarry_ @ZeMariaMacedo
— Sensei Algod (@AlgodTrading) March 13, 2022
Do Kwon, the CEO of Terraform Labs, which is the firm behind Terra, was more than happy to accept the wager. Each placed $1 million in an Ethereum address under the stewardship of crypto podcaster Jordan Fish, better known to his fans as Cobie.
Everyone wondering “what happens if Cobie dies during the bet” but the real question is… do I get to keep the money if Do, Algod and GCR all die during the bet???
— Cobie (@cobie) March 14, 2022
Under the terms of the bet, should LUNA trade below $88 by this time next year, Sensei wins and vice versa.
Sensei has been a big critic of LUNA for some time now. In a Monday Twitter thread, he broke down why he believes that the project is a scam and will be the “Bitconnnect of this bull run.”
The Terra ecosystem has LUNA, the native token and UST, the native stablecoin, with 1 UST being redeemable for $1 worth of LUNA.
Basically, if the price of UST dips below the $1 mark, an arbitrage opportunity arises and as traders take advantage of it, the price levels back to $1. The same happens if it goes above $1 as traders short it.
Sensei believes this model is plainly unsustainable and will capitulate before this time next year, leading to a spectacular dip in price for LUNA.
He noted:
So basically 11.7bn UST is basically backed by luna order books, in the best case, it can maybe sustain a 1-2bn sell right now. For now, they have driven up demand with the 20% fixed apy printed out of thin air which is unsustainable.
He accused LUNA fans of deceiving themselves that “demand will infinitely keep exceeding supply. The moment supply exceeds demand people will panic and start mass redeeming UST for LUNA. Does this remind you of something? (cough cough Ponzi).”
$ust/ $luna is basically a glorified $titan ponzi, at least iron was 80% collateralized.
The moment either a blackswan event happens or supply>demand it will be a race to the bottom and luna orderbooks wont be able to hold the billions in selling pressure from UST.
— Sensei Algod (@AlgodTrading) February 16, 2022
Related: Terra (LUNA) eyes top position in staked value after overtaking Ethereum, Solana still ahead
There is one positive outcome – aside from the entertainment that the bet is set to present in a year’s time. Do Kwon said that regardless of the outcome, he will donate $1 million to Angel Protocol, a Terra-based protocol for creating perpetual charity endowments. He’ll also buy $1 million in Terra altcoins and burn them at a time like this next year.
Regardless of the outcome of the bet, I will donate $1M to @angelprotocol charity and spend $1M on buying Terra altcoins and burn them on March 14th 2023
Not in it for the money
— Do Kwon 🌕 (@stablekwon) March 14, 2022
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