![\"Dogecoin](\"https:\/\/i-invdn-com.investing.com\/news\/LYNXMPEB3E0UM_L.jpg\")
\n\u00a9 Reuters. Dogecoin Creator Says This Will Make You Lose Faith In ‘Crypto Bros’<\/span>
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Billy Markus, co-creator of (CRYPTO: DOGE), believes that the latest cryptocurrency catastrophe is reason enough to lose faith in \u201ccrypto bros.\u201d<\/p>\n
What Happened: On Monday, Markus shared a series of tweets by Aztec Network\u2019s Jonathan Wu explaining the drama surrounding the (CRYPTO: LUNA) ecosystem.<\/p>\n
read this thread to lose faith in crypto bros please https:\/\/t.co\/37hl3eGp7P<\/p>\n
\u2014 Shibetoshi Nakamoto (@BillyM2k) May 10, 2022<\/p>\n<\/blockquote>\n
Wu noted that the stabilizing mechanism between Terra\u2019s stablecoin TerraUSD (CRYPTO: UST) and LUNA had been displaced thanks to the \u201cmagical chaos of algorithmic stables\u201d and some amount of (CRYPTO: BTC) systematic risk.<\/p>\n
As the price of LUNA crashed to $28.03 earlier today, its market cap fell below UST\u2019s $14 billion. According to Wu, the most concerning part about this is the average redemption price of LUNA for UST exceeding LUNA\u2019s current price in the market.<\/p>\n
Let me slow that one down:<\/p>\n
– $LUNA price high<\/p>\n
– $LUNA burned, many $UST minted<\/p>\n
– $LUNA’s price fall<\/p>\n
– $UST redeemed for many $LUNA<\/p>\n
That is bad mmkay?<\/p>\n
\u2014 jonwu.eth (@jonwu_) May 9, 2022<\/p>\n<\/blockquote>\n
\nNow, Bitcoin is being driven lower due to macro and (ironically) expectations that LFG will be forced Bitcoin sellers due to $UST peg pressure.<\/p>\n
Any redemptions of $UST -> $BTC now will essentially be booked losses for LFG, when they could have just sat on stables instead.<\/p>\n
\u2014 jonwu.eth (@jonwu_) May 9, 2022<\/p>\n<\/blockquote>\n
Wu summarized the past few days’ events by concluding that UST is \u201c100 magic dollars backed by 20 bitcorns and 80 magic beans.\u201d<\/p>\n
tl;dr$UST is 100 magic dollars backed by 20 bitcorns and 80 magic beans, but some people don’t think it’s worth 100 real dollars, so LFG is selling bitcorns to buy more magic dollars to convince people they’re worth 100 real dollars, all so the magic bean holders don’t get sad<\/p>\n
\u2014 jonwu.eth (@jonwu_) May 9, 2022<\/p>\n<\/blockquote>\n
Price Action: According to data from Benzinga Pro, LUNA was trading at $24.17, down 60% over 24 hours.<\/p>\n
\u00a9 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.<\/p>\n