Binance Cuts Bitcoin-LUNA Perps as CZ Warns Against Algorithmic Stablecoins

Minersgarden
Binance Cuts Bitcoin-LUNA Perps as CZ Warns Against Algorithmic Stablecoins
fiverr


key takeaways

In response to Terra’s death spiral, Binance has delisted the Bitcoin-margined LUNA perpetual contract. It also reduces the maximum leverage to 8x to 8x for USDT-margined LUNA perpetual contracts. Changpeng Zhao urged cryptocurrency followers to “respect the market and act with caution” and warned about the risks of algorithmic stablecoins.

share this article

Previously, Binance CEO Changpeng Zhao issued a stern warning to “respect the market and maintain a certain degree of caution.”

Binance delists COIN-margined LUNA perpetual contracts

Binance is taking further steps to deal with the ongoing Terra crisis.

The leading cryptocurrency exchange released an update on Thursday, announcing that it will delist the COIN-margined LUNA perpetual contract. Binance Futures uses Bitcoin as the underlying asset for its perpetual contracts, which means clients need to use Bitcoin to margin their LUNA trades. The exchange has also lowered the available leverage on its USDT-margined LUNA perpetual contracts, which are now set to a maximum of 8x. The measures took effect earlier this morning as the rest of the market continued to freefall.

bybit

The move comes after the exchange halted LUNA and UST withdrawals in response to UST losing its peg to the U.S. dollar. UST is an algorithmic stablecoin that works closely with LUNA to maintain its peg, but strong selling pressure means the ecosystem is close to collapse. Things went awry on Saturday and things worsened for Terra this week, with UST still shorting the dollar at $0.60 and LUNA changing hands for pennies. LUNA is down another 98.5% today and is trading just above $0.02.

Binance’s CEO and best-known figure, Changpeng Zhao, also weighed in on what has been dubbed one of cryptocurrency’s greatest black swan moments. The popular entrepreneur posted a storm of tweets earlier on Thursday, alerting his followers to the risks associated with the cryptocurrency market. “We need to respect the market, but also be cautious. It cycles up and down. Especially the fact that it doesn’t always make sense,” he wrote, before starting work on algorithmic stablecoins.

We are in a new market with many innovations. The Algo stablecoin is one of them. When they’re hot, they’re all the rage. When they drop, it can be a vicious circle. Some innovations will succeed, but many will not,” he wrote.

Terraform Labs said it will introduce a series of “emergency” measures to prevent the ecosystem from falling apart. Terra needs a major overhaul to make a comeback after the past few days.

Update: Since this morning’s announcement, Binance said it will delist its LUNAUSDT perpetual contract if the price falls below $0.005. It also launched the 0.00001 tick-sized LUNABUSD perpetual contract.

Disclosure: At the time of writing, the author of this article owns ETH and several other cryptocurrencies.

share this article

The information on or accessed through this website has been obtained from independent sources that we believe to be accurate and reliable, but Decentral Media, Inc. makes no representations about the timeliness, completeness or accuracy of any information on or accessed through this website. Representations or warranties. Decentral Media, Inc. is not an investment advisor. We do not provide personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may be out of date, or may be incomplete or inaccurate. We may, but are not obligated to update any outdated, incomplete or inaccurate information.

You should not make investment decisions regarding ICOs, IEOs or other investments based on the information on this website, nor should you interpret or otherwise rely on any information on this website as investment advice. If you are seeking investment advice regarding an ICO, IEO or other investment, we strongly recommend that you consult a licensed investment advisor or other qualified financial professional. We do not accept compensation of any kind for analyzing or reporting on any ICO, IEO, cryptocurrencies, currencies, tokenized sales, securities or commodities.

View full terms and conditions.



Source link

Ledger

Be the first to comment

Leave a Reply

Your email address will not be published.


*