Should You (Re-)Invest in Luna?

Yellow flag: Algorithmic stablecoins

Red flag: Terra offered 19.5% interest

If it seems too good to be true in crypto, it usually is. Terra was offering an astonishing 19.5% APY in its Anchor app: think of this like a savings account that pays 19.5% interest per year.

Red flag: Anchor was holding 75% of Terra

Attracted by these phenomenal interest rates, investors began pouring money into Anchor, which soon held the vast majority of Terra’s stablecoin. As I pointed out, this was like a single national bank holding 75% of the national currency.

Yellow flag: Terra is highly centralized

Although Terra claims it is decentralized, the true test is what happened in a crisis.

Red flag: Do Kwon instantly made plans to relaunch

Red flag: Do Kwon changed the proposal after voting began

Do Kwon’s first proposal didn’t fly, so he did another one, which he revised and called “Final.” Then he revised it again and put it to community vote. Then he revised it again while the voting was taking place.

Red flag: The vote passed anyway

So how on God’s green Earth did this proposal pass?

Huge red flag: Exchanges are going along with this

I’m disappointed in the exchanges that will list the new LUNA token, specifically Binance and FTX, for not doing more to protect the investors they supposedly represent.

You’d have to be a LUNAtic to re-invest

As value investors, ask yourself: where’s the value?

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