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Ethena (ENA) Is ‘The LUNA Of This Cycle’ With 20x Potential: Expert

Charles Edwards, the founder of Capriole Investments, has sparked significant interest and debate within the cryptocurrency community. He heralded Ethena (ENA) as “the Luna of this cycle,” but with a crucial difference: its economic fundamentals are deemed sustainable.

Edwards elaborated, “It’s 100% collateralized and the yield is variable based on market forces. Two things Luna wasn’t.” He also noted that at its zenith, Luna’s valuation exceeded ENA’s current market cap by more than twenty-fold, yet he cautioned, “ENA is not risk-free, custody and execution risk exist.”

Since its launch on April 2, ENA has seen a meteoric rise from under $0.30 to a high of $1.45. This rally is largely attributed to Ethena Labs’ strategic enhancement of its rewards program, now in its “Season 2,” which offers a 50% reward boost for users locking their ENA tokens for at least seven days. This move aims to bolster user engagement and loyalty, fostering a sustainable ecosystem for the Ethena platform.

A remarkable aspect of this ecosystem is the rapid growth of its stablecoin, USDe, which has outstripped the supply growth of established counterparts such as USDT, USDC, and DAI, reaching a $2 billion supply in just over 100 days.

However, the project’s high yields which are generated by harnessing the derivative markets and staked Ethereum have stirred skepticism among industry experts. Fantom founder Andre Cronje, among others, has raised concerns about the sustainability of these yields, which are the highest in the entire crypto industry.

Risks Involved With Ethena

Noteworthy, ENA is often compared to Terra Luna (LUNA), but the differences could not be much bigger, as Edwards also noted. While ENA is not risk free, a demise like the one of LUNA is highly unlikely. Despite that, investors need to be aware of other risks involved with ENA.

Diving deeper into the discussion of risks, CL (@CL207) from eGirl Capital offers an intriguing perspective on the behavior of derivatives traders. She clarifies, “It appears Ethena is making many people who don’t trade derivatives have a really hard time wrapping their heads around the fact that derivatives traders are so genuinely retarded that we’re willing to pay like 50%+ APR to enter a position.”

Notably, last cycle crypto traders were bidding futures so high that Bitcoin quarterlies earned “a locked-in >50% apr. She added, “just 50 days into 2021, we collectively paid 2,400,000,000$ in funding rates by the end of 2021, the market has paid as much as a decently sized country’s GDP.”

Monetsupply.eth (@MonetSupply) from Block Analitica provides a granular analysis of the risks Andre Cronje highlighted. Through his examination, several key areas of concern are outlined:

  • Oracle Risk: The potential impact on exchange positions due to Ethena providing inaccurate quotes on minting or redeeming operations. However, MonetSupply notes, “there’s rate limits on this tho so max loss is constrained and counterparties are all whitelisted (can’t just run away with the money).”
  • Liquidation Risk: Deemed not a significant factor as the portfolio is leveraged less than 1x, suggesting a conservative approach to borrowing and leverage.
  • Spread Risk: The possibility of increased basis leading to higher funding revenue, which should theoretically attract inflows. Conversely, a negative basis might cause outflows, but Ethena could benefit from closing hedged positions profitably.
  • Collateral Ratio Risk: Even though liquid staking tokens (LSTs) are given less than 100% weight on centralized exchanges (CEX), the overall low leverage mitigates this risk. The proportion of LST in spot collateral is relatively minor.
  • Custody Risk: Highlighted as one of the more significant concerns, given the reliance on custodians with a good track record and the distribution of assets across multiple entities.
  • Exchange Solvency Risk: This risk could lead to the loss of unsettled profit and loss (PnL) and some trading costs to rehedge on other exchanges. However, MonetSupply adds, “the Binance/ceffu nexus might change this assessment though, are they actually independent?”
  • Ethena Entity Risk: The internal risk related to Ethena’s keys or authentication tokens being compromised, or a team member acting maliciously.

MonetSupply concludes that despite these risks, the framework of overcollateralization on platforms like Morpho, the Maker surplus buffer, and the MKR backstop, supported by a substantial Proof of Liquidity (POL), serves as a robust mitigating factor.

At press time, ENA traded at $1.329.

Ethena ENA price

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Do Kwon: What Happened To The Terra Luna Founder?

Few names have sparked as much intrigue and controversy as Do Kwon (sometimes called Kwon Do). From the meteoric rise of Terra Luna to its sudden and tumultuous downfall, Do Kwon has become a figure of significant interest and speculation.

In this comprehensive exploration, we delve into the journey of Terra Luna’s Do Kwon, the mastermind behind one of the most talked-about projects in the crypto world. We’ll uncover the latest Do Kwon news that has kept the crypto community on its toes, analyze the Do Kwon net worth, and shed light into the future of Terra Luna without its founder.

Who is Do Kwon?

Do Kwon, whose full name is Kwon Do-hyung, is a South Korean crypto entrepreneur renowned as the co-founder and CEO of Terraform Labs. Born on September 6, 1991, in Seoul, South Korea, he has become a prominent figure in the cryptocurrency industry.

Kwon Do-hyung’s early education took place at Daewon Foreign Language High School in Seoul, one of South Korea’s most prestigious private schools. Furthermore, his academic journey led him to Stanford University in the United States, where he pursued a degree in computer science, laying the groundwork for his future endeavors in the tech and crypto industries.

Terra Luna Do Kwon

Tracing The Origins: The Path To Crypto Fame

After graduating from Stanford in 2015, Kwon Do-hyung returned to South Korea in 2016 and founded Anyfi, a connectivity solutions startup. Anyfi, which focused on a peer-to-peer Wi-Fi mesh network, was Do.Kwon’s initial foray into the tech startup world.

However, his interest soon pivoted to the then-nascent crypto market. After identifying a lack of robust crypto payment networks, he co-authored a white paper with Nicholas Platias, advocating for a decentralized payment system powered by a stablecoin to facilitate cryptocurrency payments and provide a medium of exchange with reduced volatility.

The Beginnings Of Terra Luna

This white paper caught the attention of Daniel Shin (whose full name is Shin Hyun-seung), a seasoned South Korean tech entrepreneur experienced in online payment systems. Afterwards, in 2018, Kwon Do-hyung and Hyun-seung co-founded Terraform Labs, leading to the development of the Terra (LUNA) cryptocurrency.

Terraform Labs introduced TerraUSD (UST), an algorithmic stablecoin pegged to the US dollar, in September 2020. The stability mechanism of UST, backed by the LUNA token, was a novel approach in the crypto world but ultimately led to the collapse of both cryptocurrencies in May 2022. But more on that later.

The Rise And Fall Of Terra Luna And Do Kwon

The story of Terra Luna and its co-founder Kwon Do-hyung is a tale of rapid ascension and dramatic downfall in the volatile world of cryptocurrency. It’s a narrative that encapsulates the inherent risks and potential of innovative financial technologies, and the fine line between genius and overreach.

Do Kwon Crypto Achievements

Do Kwon, as the co-founder of Terraform Labs, significantly impacted the cryptocurrency sector with the introduction of Terra Luna. Terraform Labs, under Kwon Do-hyung’s leadership, innovated in the realm of stablecoins, aiming to solve the problem of volatility in the crypto market.

Terra Luna’s unique selling point was its dual-token system: the native LUNA token and the TerraUSD (UST) stablecoin. UST was designed as an algorithmic stablecoin, an ambitious attempt to maintain a stable value relative to the US dollar without the need for traditional fiat collateral.

Do Kwon Luna: Triumphs And Trials

Terra Luna’s ecosystem experienced rapid growth and success, particularly with the popularity of its Anchor Protocol, which promised high yields on UST deposits. This contributed to a significant increase in LUNA’s value, as the protocol’s design required LUNA to be burned to mint UST, thereby reducing LUNA’s supply and increasing its price. However, the success of Terra Luna and its algorithmic stablecoin also brought increased scrutiny and challenges, especially concerning the sustainability and resilience of its stabilization mechanism.

Do Kwon Terra’s Downfall

The downfall of Terra Luna began with the destabilization of UST. Unlike traditional stablecoins backed by fiat or physical assets, UST’s stability was algorithmically linked to LUNA. To bolster confidence and add an additional layer of stability to UST, Terraform Labs amassed a significant reserve of Bitcoin. The idea was that these Bitcoin reserves could be liquidated to defend the UST peg in times of stress.

At its peak, the Luna Foundation Guard (LFG), established to manage these reserves, held over $3 billion in Bitcoin. However, when UST began to lose its peg due to massive sell-offs in May 2022, this triggered a series of events that led to the liquidation of these Bitcoin reserves. The sale of such a large amount of Bitcoin in a short period contributed to a crash in the crypto market.

This strategy of using Bitcoin as a reserve asset for an algorithmic stablecoin was unprecedented and, in this instance, ultimately proved ineffective. The rapid devaluation of UST and LUNA, coupled with the liquidation of Bitcoin reserves, not only led to the collapse of Terra Luna’s ecosystem but also sent shockwaves through the entire cryptocurrency market, eroding billions in market capitalization and investor confidence. The Terra Luna crisis highlighted the risks of algorithmic stablecoins and the complexities of using volatile assets like Bitcoin as a backing mechanism in times of market stress.

Do Kwon Net Worth

The financial trajectory of Kwon Do-hyung, marked by both remarkable successes and significant setbacks, paints a complex picture of his net worth.

The Wealth Rollercoaster: Do Kwon Net Worth

The Do Kwon net worth has been a subject of intense interest, especially in the wake of the Terra Luna collapse. At the peak of Terra Luna’s success, Do Kwon’s net worth was speculated to be in the billions, given the high valuation of the LUNA token and the Terra ecosystem. In April 2022, LUNA’s value soared, and the Terra ecosystem reached a staggering $60 billion valuation, significantly boosting the Do Kwon net worth.

However, this fortune was short-lived. Following the dramatic collapse of Terra Luna in May 2022, the Do Kwon net worth plummeted alongside the value of LUNA and UST. By July 2023, estimates placed his net worth at around $135 million, a substantial decrease from his peak wealth. Accordingly, this decline was primarily due to the obliteration of the Terra ecosystem, which significantly eroded the value of his holdings in LUNA and related crypto assets.

However, it’s important to note that the exact extent of Kwon’s current wealth, especially in liquid assets, remains somewhat opaque. His involvement in other blockchain projects and potential holdings in various cryptocurrencies may contribute to his overall financial portfolio.

Do Kwon News: The Latest Developments

Do Kwon’s situation has evolved rapidly, with significant developments unfolding after the Terra Luna collapse. As of the latest updates, Kwon Do-hyung faced legal challenges from multiple jurisdictions, including the United States and South Korea. In September 2022, a South Korean court issued an arrest warrant for Do Kwon, along with other individuals associated with Terra, on charges related to the collapse of the cryptocurrency.

Following the issuance of an Interpol Red Notice, Kwon Do-hyung was reported to have moved from Singapore and was believed to be in Serbia, before fleeing to Balkan state Montenegro. South Korean and US authorities continued their pursuit, seeking his extradition to face various charges, including securities fraud.

Do Kwon News In 2023

In February 2023, the US Securities and Exchange Commission (SEC) charged Kwon and Terraform Labs with securities fraud, alleging the creation of a fraudulent scheme that led to substantial investor losses. Afterwards, Do Kwon’s legal representatives contested these charges, challenging the SEC’s claims and its characterization of LUNA and other tokens as securities.

Authorities arrested Kwon in Montenegro on March 23, 2023, as he prepared to board a private jet to Dubai with falsified documents. Subsequently, a Montenegrin court sentenced him to four months in jail for document forgery, involving multiple passports and identity cards. This Do Kwon news followed an international search initiated by South Korean authorities, with both South Korea and the US seeking extradition related to Terra Luna’s collapse.

Terra Luna Do Kwon

In June 2023, the High Court in Podgorica confirmed that the Terra Luna founder would be held in “extradition custody” for a six-month period pending the review of South Korea’s extradition request.

The Future Outlook For Do Kwon And Terra Luna

Uncertainty and complexity shroud the future outlook for Do Kwon and the Terra Luna project. For Kwon, the immediate focus is on the legal challenges he faces. Furthermore, his extradition and the outcomes of the trials will significantly influence his personal and professional future.

As for Terra Luna, its future hinges on restoring investor confidence and demonstrating the viability of its revamped ecosystem, Terra 2.0. Furthermore, the effectiveness of Terra 2.0 and its ability to attract new users and developers will be critical in determining the project’s long-term viability. However, as of November 7, the Terra Luna Classic (LUNC) price was on the verge of a breakout from a multi-month downtrend channel.

Terra Luna Classic LUNC price

FAQ

What Is The Current Do Kwon Net Worth?

As of July 2023, estimates place the Do Kwon net worth at around $135 million, marking a significant decrease from its peak during the height of Terra Luna’s success.

Who Is Do Kwon?

Do Kwon (whose full name is Kwon Do-hyung) is a South Korean entrepreneur, the co-founder, and CEO of Terraform Labs, known for creating the Terra Luna cryptocurrency ecosystem.

How Has Do Kwon News Affected Terra Luna’s Stability?

The Do Kwon news, especially regarding legal challenges and his arrest, has negatively impacted Terra Luna’s stability, eroding investor confidence and raising concerns about the project’s future.

What Was Do Kwon Luna’s Strategy For Crypto?

Kwon’s strategy involved creating a stablecoin ecosystem with an algorithmic approach, aiming to reduce crypto market volatility and promote wider adoption of digital currencies.

What Are the Implications Of Do Kwon Stanford Education On His Career?

Kwon’s Stanford education provided a strong foundation in computer science and a network of peers and mentors, instrumental in his foray into the tech and crypto industries.

What’s The Latest Do Kwon News And Terra Luna?

The latest Do Kwon news include his arrest in Montenegro in March 2023 for document forgery and ongoing legal proceedings involving his extradition to face charges related to the Terra Luna collapse.

What Was Do Kwon’s Vision For Terra Luna?

Kwon envisioned Terra Luna as a blockchain platform that would revolutionize digital finance by offering a stable and scalable cryptocurrency, thereby addressing the limitations of traditional cryptocurrencies.

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Road To $1: Why Did Terra Classic (USTC) Rise 300% In One Day?

TerraClassicUSD (USTC), the algorithmic stablecoin tied to the LUNA ecosystem, recently went on an upward trajectory to register gains of over 300%. In a stunning cascade of events, the token’s price spike in the past 24 hours has left investors wondering about the implication for Terra Classic (LUNC) and the potential revival of the LUNA ecosystem.

USTC Coin Spikes 300% In One Day

USTC has lost most of its usefulness as a stablecoin since its implosion in 2022 when it was known as UST. The stablecoin lost its peg to the US dollar which resulted in a chain of events that led to its sister token, LUNA, also losing most of its value and the demise of the Terra-LUNA blockchain ecosystem. After it lost its peg to the US dollar, the stablecoin was rebranded as UST Classic and its value fell to as low as $0.01.

It’s already been more than a year since the crash, but it looks like the token and some members of the LUNA ecosystem are not ready to give up yet. The latest price action has seen the token spike 300% from $0.01569 to $0.0755 in the past 24 hours. The catalyst for this surge can be attributed to Terra Classic Labs (TCL), a LUNC community project.

Terra Classic Labs was created in October 2023 by some members of the former thriving LUNA ecosystem. According to its website, it is dedicated to supporting new LUNC projects for the revival of the Terra ecosystem.

In a social media post by Trader QT, an official partner of Luna Classic Labs, the team made a massive purchase of approximately 25.6 million USTC for $500,000 at an average price of $0.021 per $USTC. This move sent USTC spiking, fueling hopes that Terra Classic Labs can help revive and stabilize the cryptocurrency.

Can Terra Classic Return To $1?

Although the move by Terra Classic Labs sent USTC on a surge, the stablecoin is still trading at $0.0516, far from a $1 price point. The crypto will have to register another gain of 1837% from its current price before it can regain its peg to the US dollar, showing how far behind it is.

The recent price action however did have some sort of bullish action on Terra Classic LUNC, as it has also spiked by 25% in the past 24 hours. Terra Classic is trading at $0.0001004 at the time of writing.

Although the Terra Classic community hasn’t given up on the cryptocurrency, the LUNA ecosystem has since rebranded and moved from Terra Classic LUNC to a new chain (Terra 2.0) with its own native token called LUNA. 

It would seem LUNA also reacted positively to the TerraClassicUSD surge as data from Coinmarketcap shows LUNA has increased by 17.8% in the past 24 hours and is now trading at $0.79.

USTC price chart from Tradingview.com

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Analyst Predicts Terra LUNA To Surge By 80-100% Following Key Event

LUNA, the native token of the Terra 2.0 blockchain, was among the many gainers in the past week positively affected by Bitcoin’s impressive rally toward the $35,000 mark.

According to data from CoinMarketCap, LUNA is up by 13.96% in the last seven days, providing some relief for investors who have had to endure the token’s bearish form in the previous weeks leading to this price rise. 

As expected, LUNA’s current bullish form has now attracted much attention, with some analysts speculating there could be more gains in the coming weeks. 

LUNA Could Double Its Value After Breaching Major Trendline, Analyst Says

In a post on X on Sunday, crypto analyst Captain Faibik shared with his 67,000 followers an intriguing bullish prediction on LUNA’s price trajectory.

Faibik, who claimed to not be a LUNA enthusiast, noted that the altcoin has recently broken a major bearish trendline and could potentially gain by 80-100%.

According to Faibik’s analysis, LUNA traded above $0.47 in the past week, breaching a bearish trendline that stretches as far back as January 2023 on the token’s daily chart.

Traditionally, trendlines are used by traders to connect several price points together and provide some insight into the potential direction of an asset’s price movement. 

When an asset’s price moves out of an established trendline, as in the case of LUNA, it can be interpreted as an impending price reversal.

Since the start of 2023, LUNA has produced an overall negative price performance, losing over 63% of its value in the last 10 months. However, if Faibik’s prediction proves true, the popular altcoin could be on its way to a remarkable recovery. 

At the time of writing, LUNA trades at $0.468 with a 0.70% decline in the last day. With an 80-100% price increase, this price could rise as high as $0.934 in the coming weeks.

Meanwhile, LUNA’s daily trading volume is currently down by 3.73% and valued at $48.67 million. With a market cap of $263.92 million, LUNA is ranked as the 117th largest cryptocurrency.

Related Reading: Is Terra Classic Planning For USTC To Be Pegged To The Dollar Again?

Terra Community Approves New Proposal 

In other news, the Terra Community has recently passed governance proposal 4790 aimed at the active and aggressive development of the Terra ecosystem with resources provided by Terraform Labs.

Under this newly approved proposal, Terraform Labs, alongside Terra community partners, will explore opportunities to utilize non-LUNA capital in driving the growth of the project’s economy. 

In addition, 125 million LUNA will be staked by a Terra community council to encourage and reward active network engagement, offer essential services to support the ecosystem, and guarantee equitable decentralization.

LUNA

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Is Worldcoin Just Another LUNA? Crypto Influencer Reveals

Worldcoin (WLD) has recently emerged as a subject of fervent discussion especially due to its biometric data collection through retina scans. Its launch came in amid the growing interest in decentralized finance (DeFi) and blockchain technology as well as new tokens and projects constantly striving to stand out and make a significant impact.

Among the voices guiding investors through the labyrinthine world of crypto is Jordi Alexander, a renowned crypto influencer and the chief alchemist of the Mantle Network. Recently, he stirred conversations by drawing a parallel between Worldcoin and LUNA, though not entirely for auspicious reasons.

According to the crypto influencer, Worldcoin might just be the next LUNA given some factors that comes with the token’s objective which makes it similar to LUNA which was portrayed as a “new digital currency” that needed to “maximize adoption in order to become useful.”

The Rise Of Worldcoin And Its Ambitions

Worldcoin, under the vision of Sam Altman – the brains also behind ChatGPT, has made headlines with its mission. The Worldcoin Foundation envisions creating the largest decentralized identity and financial network on the globe.

Central to this vision is Worldcoin’s native token, WLD. For the project to be successful, WLD’s widespread adoption is imperative, as is its ability to service the “Orbs” used in the new user onboarding process via retina scans.

In his discussion on Crypto Banter, Alexander elaborated on Worldcoin’s goal to position WLD as an alternative to fiat currencies. Their agenda to become a digital base currency mimics the aspirations that LUNA once held.

The gravity of this comparison is substantial, especially when considering LUNA’s precipitous fall from grace due to financial challenges.

Trillion-Dollar Bubble In The Making?

While drawing parallels with LUNA, Alexander’s intent wasn’t to prophesize an equivalent success for Worldcoin but rather to signal the risks of potential downfall. A primary concern centers around the controversial methods that Worldcoin employs, notably, collecting biometric data through retina scans.

The rapid appreciation of WLD’s value further compounds these concerns. Since its inception just over a week ago, the token’s value has surged significantly from $0.1 to as high as trading above $5. This growth has inevitably attracted a slew of investors, catapulting its market capitalization to more than $200 million.

It’s this velocity of growth, coupled with Worldcoin’s overarching ambition, that leads Alexander to opine that the cryptocurrency might be veering into “bubble” territory. He even suggested the possibility of it snowballing into a trillion-dollar bubble if unchecked. Worldcoin (WLD) price chart on TradingView

Worldcoin (WLD) price is moving sideways on the 4-hour chart. Source: WLD/USDT on TradingView.com

Featured image from Unsplash, Chart from TradingView