Since hn is so negative on crypto, it likely missed the interesting details of the technical attack. Terra was doing a migration from a 3-token curve liquidity pool to a 4-token curve liquidity pool. During this migration their reserves are vulnerable, at at this point a well-capitalized attacker borrowed 100k BTC, converted it into UST and started attacking the peg.
https://www.youtube.com/watch?v=FqW4-FGA9j4
Sidenote (and i am going to be negative on crypto) but the first 10 minutes of this video are pretty wild to me?
They keep saying how this is normal, happens, you will recover, it happened to all of us. Really? 50bilion dollars get hacked and response is "invest more money you will recover".
Then there are multiple crypto ads about protecting your "hard earned money" (wtf whats less hard earned than investing) and about wierd investment tools that will automatically invest into some esoteric assets the host gets stuck reading because even he doesn't know them.
Finally they explain some really complicated mechanism this tech was using. That left me wondering what is this even for?
While looking into this, I also ran into the "DegenBox UST MiM strategy" which allegedly gave 100% returns (until it didn't), but atm I don't understand the mechanism; I think it will make an interesting addendum to the story for the intrepid reader/rabbit hole explorer.
"As the LUNA price continued to plummet, the Chainlink price feed used by the protocols became inaccurate, allowing funds to be borrowed against vastly overpriced LUNA collateral."
The entire point of defi is to circumvent the establishment/regulation. It makes little to no sense to say "but it was attacked"... Yea, that's the fucking point. That's why we have regulations, FDIC insurance, and reserve limits.
George soros attacked the pound in a similar manner, so you points dont exclude traditional finance. Of course, pound wasnt susceptible to a death spiral
You're missing the point. As these things are regulated, the holes get plugged by the authority regulating them. This is not so much the case in the crypto space. They see regulation as an ineffeciency, that needs to be disrupted
Meanwhile they're discovering that these regulations were actually safeguards, and they're not solving any problem. They're just reinventing the wheels of the finance sector.
Its related to the curve wars which itself is an interesting walk through game theory. https://every.to/almanack/curve-wars