Was Terra Luna Death Spiral a Result of an Inside Job?

New research suggests one of the active wallets (dubbed ‘Wallet A’) may be linked to Terra Labs or the Luna Guard Foundation (LFG). Prior blockchain analytics study highlighted the 7 main wallets that contributed to the collapse of Terra Luna.

Jump Crypto released a postmortem analysis, detailing what occurred that led to UST de-pegging from the US Dollar. Other blockchain analytics platform analysis, suggest that Celsius may have been involved, is also available.

The most interesting part of the postmortem of Terra Luna is surrounding the mysterious ‘Wallet A’.

Wallet A Actions

“At 21:44 GMT, Terraform Labs (TFL) withdrew $150 million in UST liquidity. This made the Curve pool relatively balanced, but much smaller.

“At 21:57, a relatively-inactive account (‘Wallet A’) swapped $85 million UST for USDC in this pool. (This was the largest swap transaction in that particular Curve pool ever.) Such an action pushed the Curve pool out of balance again.

“Moreover, Wallet A had transferred $108 million in UST to Binance earlier in the day, and these transfers coincided with elevated trading volumes at Binance and the worsening  liquidity 
Liquidity

The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash. The most liquid asset of all is cash itself. ·      In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. ·      Nothing is more liquid than cash, while other assets represent varying degrees of liquidity. This can be differentiated as market liquidity or accounting liquidity.·      Liquidity refers to a tangible construct that can be measures. The most common ways to do so include a current ratio, quick ratio, and cash ratio. What is the Definition of Liquidity? Liquidity is a common definition used in investing, banking, or the financial services space. Its primary function is to ascertain how quickly a given asset can be bought, sold, or exchanged without a…