Quote from: cryptoaddictchie on May 13, 2022, 04:29:43 PM

Quote from: Xal0lex on April 28, 2022, 07:36:15 PM

After all, such high payouts to stakers must be accompanied by constant replenishment of these projects reserve funds. But what will happen if the money stops flowing in the right amount?

Exactly what happened on Luna. This incident showcase vulnerabilities of the idea of stable backed pegged with not stable cryptocurrency and also the reserved fund can be attacked by whales especially there is a leverage trading that could lower the funds or depleted once hit a threshold.

Even bitcoin, which historically seems to be always rising, tends to be very volatile in the short term. Funds are also someone's investments and they are not blocked funds, that is, they can be withdrawn by the holders at any moment. LUNA did a great job of showing that the size of the fund doesn't matter, they bought over 45,000 BTC, but those bitcoins were emptied in an instant. I think that if we are talking about a reserve fund that is supposed to hold the exchange rate, then those funds should be blocked by some kind of smart contract or something like that.