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White Whale: Enabling the UST peg in a decentralized manner

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When looking at the Cryptosphere, there are a number of challenges that are immediately present. The maintenance or consistency of the UST (TerraUSD) peg, is one of these challenges. If a stablecoin cannot hold its peg, the entire ecosystem that is built around it can fail. This is not a hypothetical situation, but one that has happened to other algorithmic stable coins, it resulted in the peg being lost and projects dumping to zero.

Another issue smaller investors are facing is the “whales”. Whales have been known to manipulate markets, simply to take out smaller investors, make use of bots to lower initial liquidity levels, as well as short projects to zero, essentially to make more money. Generally speaking, whales have access to the highest margin and lowest risk opportunities in the market. These include access to early rounds, private sales, trading discounts, market making, and arbitrage trading. In contrast, regular DeFi users are looking for a level playing field where everyone has an equal opportunity.

In the Terra ecosystem, arbitraging UST back to peg is uniquely appealing because not only does it generate delta-neutral profit, it also serves the critical function of keeping the peg, thereby making the Terra ecosystem more secure and more robust. However, getting into arbitrage requires capital, technical knowledge, and bot infrastructure; this is why it is (up until now) a whale’s game. 

The Solution

At White Whale, the vision is clear – create a platform that enables the enforcement of the UST peg in a decentralized manner by providing the technical tools which allow regular users to participate in complex trading strategies such as arbitrage trading. This is achieved through the opening up of L1 seigniorage arbitrage to the Terra community and empowering them to earn delta-neutral profits while simultaneously contributing to keeping the peg.

Ultimately, White Whale’s goal is to stabilize the entire Terra ecosystem through community arbitrage, and then cross-chain arbitrage being added to the platform to take advantage of the opportunities that will open up through wormhole and the IBC. As far as future development options go, when one looks at community-led arbitrage, the opportunities are endless.

So here are some of the key features and benefits of White Whale:

  •       Immediate Profitability 
  •       Simple User Experience 
  •       Delta Neutral Profits 
  •       No Impermanent Loss 
  •       Economic Utility 
  •       Demand Pool for UST 
  •       Secure the Terra Ecosystem 

All of the above features and benefits are discussed in detail in the recently released light paper, available on the new website:

Whilst this is just the beginning for White Whale, it signals opportunities that should allow retail investors similar opportunities to the whales. Arbitraging UST back to peg, within the Terra ecosystem, will serve the most critical function of keeping the peg, thereby ensuring the Terra ecosystem is more secure and more robust. By removing the barriers to entry, retail investors have the opportunity to become the Whale.

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Disclaimer: This is a paid post and should not be treated as news/advice.


With Masters in Mass communication and journalism, Anjali's interests lie in blockchain technology adoption across emerging economies.
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