Terra founder Do Kwon recently placed a $1 million bet with a trader on twitter that price of LUNA, the native token on the Terra blockchain, will stay above $88 until a year from now. Kwon responded to a challenge issued by @AlgodTrading.
The two parties then proceeded to lock in their bet with @cobie, co-founder of the crypto podcast UpOnlyTV, who confirmed the receipt of the $2 million in Tether. On March 14, 2023, @cobie will transfer the full amount to the winning party.
Kwon and Algod agreed to consider the 24 hour average trading price of LUNA to settle the bet. The token is currently trading at $93.8, just below lifetime highs.
Algod has repeatedly called the blockchain a “ponzi scheme”, stating that the dollar-pegged Terra stablecoin (UST) will not survive a sharp selloff in the LUNA ecosystem. Their challenge comes as an extension of this stance.
Algod also received offers from other traders for their challenge, although it was not immediately clear whether money had changed hands.
LUNA rallies on high yield offered by Terra
The LUNA token has been on a tear, rallying as much as 50% over the past month and coming close to a record high of over $100. Buying into the token was driven by demand for the relatively high yields offered by deposits in Terra-based stablecoins.
Specifically, the Anchor Protocol (ANC), which is based on the Terra blockchain, offers a market-beating, nearly 20% yield on UST deposits. LUNA can be used to stake on the platform, and can also be burnt to produce UST, at a ratio of $1 of LUNA for $1 of UST.
Recent market volatility caused by the Russia-Ukraine conflict has boosted demand for stablecoins, causing traders to seek UST exposure through LUNA. The Terra community has also been active in supporting UST, recently building a $1 billion Bitcoin reserve to maintain the near-20% yield offered by ANC.
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