The Lies of TradFi

So TradFi relies on the ignorance of the general public regarding monetary systems in saying “Terra was ripe to crash because it was uncollaterized.”

What TradFi fails to mention is what their own debt-based fiat currencies are backed by and how their money monopoly operates. Anyone who understands monetary systems understands that the basis of any money without intrinsic value (real-world use outside of being money), including the almighty dollar and Bitcoin, is faith and trust in the money. The attackers understood that the stability of money is dependent on the demand for that money. For example, why is the $ more stable than the Mexico peso? Because the $ is the world reserve currency, whose status confers onto it major demand.

But what else creates artificial demand which in turn creates a price floor for fiat currencies that cryptocurrency does not have? Legal tender laws.

The central banks, which are literal money monopolies, coerce populaces through laws and force to use their uncollaterized debt money which creates artificial demand for them and creates an artificial price floor. This is how a command, and not a “free-market” economy works. In a free market economy, the market participants decide for themselves what is acceptable as payment for goods and services. The authorities role in such a case would be to ensure that fraudulent money is not used and qualify the money as legitimate that the market participants had already agreed to use.

So what really brought down Terra? The ability of the attackers to manipulate markets and make people lose faith and trust in UST, algorithmic stablecoins, DK, LFG, and Terra itself. Unlike Central Banks and governments, cryptocurrencies do not have the power or authority to coerce the populace under them via force and legal tender laws to use their currency to establish a price floor. In essence, this puts cryptocurrencies at a disadvantage vs fiat and their upcoming CBDC replacements.

In summary: Any money without intrinsic value or artificially-induced demand via force, both of which establish price floors for the currency in different ways, is susceptible to such an attack and their price floors are all 0.

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