graph LR
A(((exchange freedom)))
B(((controlled interest)))
C(((stable exchange rate)))
A -..- B -..- C --- A
graph TB
su[/sBABEL goes up while gBABEL low/]
suu[/sBABEL goes up while gBABEL high/]
sd[\\sBABEL goes down a lot\\]
gl ==>|sBABEL demand increase| su
sd ==>|collateral goes down| gd
gh ==>|sBABEL demand increase| suu
su ==>|"collateral (sBABEL) goes up"| gu
%%--------------------------
subgraph stable protocol
gh((gBABEL high))
gd[\\gBABEL goes down\\]
gu[/gBABEL goes up/]
gl((gBABEL low))
gh -.->|gPIVOT supply increase| gd
gd -.-> gl
gl-.->|"collateral (sPIVOT) amount increase"| gu
gu -.-> gh
end
| PIVOT | Terra Luna | |
|---|---|---|
| Equity Token | sBABEL | LUNA |
| Gas Token | gBABEL | UST |
| Promised Fixed Rate | No | Yes |
| Interest Rewards Given To | Equity token stakers | Gas token stakers |
graph TB
subgraph Ponzi miracle
su[/LUNA goes up/]
end
%%--------------------------
subgraph stable protocol
gh((UST high))
gd[\\UST goes down\\]
gu[/UST goes up/]
gl((UST low))
gh -.->|UST supply increase| gd
gd --> gl
gl -.->|UST supply decrease| gu
gu --> gh
end
%%--------------------------
subgraph death spiral
sd[\\LUNA goes down\\]
end
gl ===>|LUNA supply increase| sd
sd ===>|decrease the reserve to coin interest| gd
gh ===>|LUNA supply decrease| su
su ===>|increase the reserve to coin interest| gu
%%risk([increase arbitrage risk])
%%sd --> risk
%%su --> risk

Abstract illustration of LUNA's instability.