Experts predicted the collapse of the LUNA cryptocurrency 4 years ago

Ethereum (ETH) cryptocurrency developer Mariano Conti, who previously served as the head of smart contracts research at MakerDAO, recalled that back in 2018, experts predicted the collapse of Terra (LUNA). He noted that experts discussed the cryptocurrency’s shortcomings in April 2018 and were extremely far-sighted in these discussions.

The so-called «Death Spiral» of Terra (LUNA) was predicted 4 years ago. Programmer Cyrus Younesi of MakerDAO criticized the architecture of Terra (LUNA) and its stablecoin TerraUSD (UST) on one of the social networks. At the time, he stated that the project was bound to fail and wondered why the startup’s creators did not understand this.

Younessi also mentioned the tragedy of NuBits (USNBT), a stablecoin that supported dubious algorithms and whose value fell in the second quarter of 2016.

Yunessi was supported by former Coinbase CEO Linda Xie, who also criticized the mechanism of supporting UST exclusively with the LUNA token. According to Xie, such a security scenario is too fragile. Any panic in the market on the part of investors will easily trigger a «death spiral» — a scenario where two cryptocurrencies — stablecoin and its underlying token — will drop to almost zero.