초록
영어
This paper explorers the contributing factors to the Terra (UST)-Luna crash in May 2022. We argue that the crash was primarily fueled by the unsustainable interest rates offered by the Anchor Protocol. Initially, Terra was designed to facilitate fee-free payments and ensure stability through a diversified demand base from payment services. However, the launch of the Anchor Protocol in 2021, with its 19.45% interest rate, shifted UST's focus towards speculative demand. This change led to an unsustainable increase in UST's supply, ultimately triggering a run from Terra. We discuss flaws in the governance mechanism for setting Anchor Protocol's interest rates. The exorbitant yield offered by the Anchor Protocol significantly contributed to undermining Terra's long-term stability. The speculative demand incited by the Anchor Protocol's high interest rates was likely a major factor in the Terra collapse in May 2022.
목차
Ⅰ. Introduction
Ⅱ. A Bird’s Eye Perspective on the Terra-Luna Collapse
Ⅲ. Economic Discussion of the Potential Causes of the Crash
1. The interest rates of the Anchor Protocol
2. Deposit Growth in the Anchor Protocol
3. Critical appraisal of other causes of crash
4. Potential design flaws?
Ⅳ. Conclusion
References
Appendix