Crypto_Carlosa Authors Onchain Wizard
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How to make a >800 million dollars in crypto attacking the once 3rd largest stablecoin, Soros style:
Everyone is talking about the $UST attack right now, including Janet Yellen. But no one is talking about how much money the attacker made (or how brilliant it was). Lets dig in🧵
Our story starts in late March, when the Luna Foundation Guard (or LFG) starts buying BTC to help back $UST. LFG started accumulating BTC on 3/22, and by March 26th had a $1bn+ BTC position. This is leg #1 that made this trade (or attack)
The second leg comes in the form of the 4pool Frax announcement for $UST on April 1st. This added the second leg needed to help execute the strategy in a capital efficient way (liquidity will be lower and then the attack is on).
We don't know when the attacker borrowed 100k BTC to start the position, other than that it was sold into Kwon's buying (still speculation). LFG bought 15k BTC between March 27th and April 11th, so lets just take the average price between these dates ($42k).
So you have a ~$4.2bn short position built. Over the same time, the attacker builds a $1bn OTC position in $UST. The stage is now set to create a run on the bank and get paid on your BTC short. In anticipation of the 4pool, LFG initially removes $150mm from 3pool liquidity.
Everyone is talking about the $UST attack right now, including Janet Yellen. But no one is talking about how much money the attacker made (or how brilliant it was). Lets dig in🧵
Our story starts in late March, when the Luna Foundation Guard (or LFG) starts buying BTC to help back $UST. LFG started accumulating BTC on 3/22, and by March 26th had a $1bn+ BTC position. This is leg #1 that made this trade (or attack)
The @LFG_org now #hodl 24,954.96 #Bitcoin at a total balance of $1,109,824,161.90 USD in the Atlas Reserve.
— LFG_Reserve (@LFG_Reserve) March 26, 2022
The second leg comes in the form of the 4pool Frax announcement for $UST on April 1st. This added the second leg needed to help execute the strategy in a capital efficient way (liquidity will be lower and then the attack is on).
1/ Introducing the 4pool - between @fraxfinance, TFL and @redactedcartel we pretty much own all the cvx
— Do Kwon \U0001f315 (@stablekwon) April 1, 2022
UST-FRAX-USDC-USDT
Curve wars are over, all emissions are going to the 4pool https://t.co/LNJs7CAfcV
We don't know when the attacker borrowed 100k BTC to start the position, other than that it was sold into Kwon's buying (still speculation). LFG bought 15k BTC between March 27th and April 11th, so lets just take the average price between these dates ($42k).
So you have a ~$4.2bn short position built. Over the same time, the attacker builds a $1bn OTC position in $UST. The stage is now set to create a run on the bank and get paid on your BTC short. In anticipation of the 4pool, LFG initially removes $150mm from 3pool liquidity.