So the cryptocurrency markets have been in the slump lately, but no token has taken a bidding just quite like luna just a few weeks ago. It was trading at about 100 per token. However, the past couple days it lost around 98 of its value. I guess that what happens when you don't have a cute dog as your logo, so what happened to luna well sit back, relax and listen to this.

You see, luna is, or rather was a stable coin, and algorithmic stable coins might be an innovative concept, but, as we learned in the past few days, you know cool and innovative ideas do not guarantee success. Now the idea of a stablecoin is for it always to be worth at least one us dollar, making it a useful digital substitute of actual currency sounds good right and that algorithmic part was supposed to do one job which is being swappable for another token. Now this token was luna, luna and terror were supposed to be swappable and since luna had no fixed value, once the value of terror dropped below one dollar, it could be burned and exchanged for one dollar per coin worth of luna and vice versa. But as we know now that mechanism broke down like a house of cards and terror dropped below one dollar.

Now it's currently worth around 40 cents and luna, don't even get me started. That thing is completely out of commission now. The idea of stable coins is that they're well stable, but if you have to say it, if you have to put it in the name, it's probably not true. You ever notice how every country that has democratic in this name is actually not so democratic at all.

It's the same thing. Well, the thing is that stable coins are usually backed by an asset. In this case, it's the us dollar. That's why the past year price was always one dollar per token.

However, here's where the wheels come off and here's where the story took a turn for the wars now look terra luna plummeted in a lehman brothers kind of burst, turns fashion and took there along for the ride, as well as the entire cryptocurrency market. Right now, you can see part of the effects on everything. Now, what happened is pretty much an avalanche, a massive sell-off of terra at the same time, on multiple exchanges, along with multiple short positions and that led to 300 million worth of terror, tokens being sold at the same time and that unpacked, the coin from under one Dollar now that of course triggered a lot of fear and a bigger secondary selloff, which led to a loss of a hundred billion dollars of market for luna. I'm not going to pretend here.

I know why this safety mechanism broke down, but it is enough to say that you know the self was just too big for the algorithm to handle. The question is given what just happened is luna finished. I don't really know, but one thing is for certain. This caused a lot of people to lose confidence in luna, so the first thing would be to re-peg luna back to the one dollar.

If they tried to fix it and it seems to be currently the priority, but look it's going to be a tough job. According to the current recovery plan of luna, they're, basically planning to increase the minting from 300 million to 1.2 billion and hoping that as more luna is being minted, this may or may not return the tera to one dollar. Basically, the idea is, let the crypto printer go blue. Now i don't know if this thing is gon na work or not, but even if it is it's gon na take months, if not years, to fix this, because a lot of trust was lost and terra has to regain the trust of investors.

And at this point it doesn't seem very likely, but who knows now before i go, i want to give a huge shout out to my daughter who made me this bracelet. I absolutely love it. Thank you so much, i'm gon na wear it from now on in every video. So if you wonder what this is, it's actually a gift for my daughter now this thing is probably cost like a buck, but for me it's worth more than luna.

Oh wait! Luna! Isn't really valuable i just had to get in there. I absolutely love this thing and it's definitely worth more than luna even before the collapse. Now, as always, if you want to comment below - and let me know what you guys know and think about this, i know there's a lot of conspiracy theories, shared below i'd love, to read your thoughts as always a huge shout out for the channel members and the Patrons in a second you're going to see the new channel members, the new patrons that just joined. Thank you.

So much i'll see you tomorrow, 30 hertz straight up.