That is exactly what was so Ponzi about UST/Luna in the first place. It all works well and fine as long as the value of Luna keeps going up, since you have exce

That is exactly what was so Ponzi about UST/Luna in the first place. It all works well and fine as long as the value of Luna keeps going up, since you have excess backing for every UST created. However, soon as Luna starts going down, your entire ecosystem is at an existential risk. This mechanism was further prolonged by Anchor, a DeFi protocol that "guaranteed" a "stable" 20% return on deposited UST. What it practically did was encouraged people to buy and hold UST, thus (a) providing much needed liquidity for creators of Luna/UST to cash out into other stablecoins or real money and (b) kept the musical chairs running, since as long as the greater fools kept buying and capital kept flowing into the ecosystem, the stability of UST/Luna wasn't challenged. These people should be in jail, IMO. UST/Luna was a technologically advanced Ponzi scheme, which also "solved" the age old Satoshi problem of "if you, the creator, have a few billion dollars in Bitcoins, but not enough people/liquidity in the market to sell it to, how do you cash out?"