Written by: David, TechFlow TechFlow
As of the evening of December 10th, what you may not have noticed is that the contract data for the LUNA token is extremely absurd.
Without any technological upgrades or positive ecosystem news, the total 24-hour trading volume of the LUNA series contracts (including LUNA and LUNA2) across the entire market has approached US$1.8 billion .
LUNA itself has also increased by 150% in the past week.
In comparison, the combined trading volume of LUNA and LUNA2 now ranks among the top ten in the entire market for contract trading volume, second only to HYPE's $1.88 billion.
The funding rates for the two are -0.0595% and -0.0789%, respectively.
High negative rates mean that the market is not only crowded, but also in a state of extreme divergence: a large amount of money is short, while another, even larger amount of money is taking advantage of this crowding to squeeze shorts.
We all know that LUNA has virtually no fundamentals left. This $1.8 billion in liquidity is essentially trading a bet on an upcoming lottery draw:
Tomorrow, December 11th at midnight, Do Kwon, the former "King of Stablecoins," will have his final sentencing hearing in Courtroom 1305 of the U.S. District Court for the Southern District of New York.
The market is betting real money on the sentence of this former crypto tycoon.
Sentences can be long or short; speculation never stops.
To understand this $1.8 billion in contract trading volume, we need to look at the current progress of this case.
For most people, the name Do Kwon has faded from view since the epic collapse of 2022.
In fact, this former crypto tycoon had already been extradited to New York in late 2024. In August of this year, he formally pleaded guilty in Manhattan federal court to multiple charges, including securities fraud.
Tomorrow's hearing is not a debate about "guilt or innocence," but a final decision on the length of the sentence. According to the latest court documents, there is a significant gap between the prosecution and the defense in their sentencing recommendations:
The prosecution is seeking 12 years in prison.
The U.S. Attorney's Office took a hard line, citing the billions of dollars in losses caused by the Terra crash and Do Kwon's fraudulent activities regarding the "fake blockchain" of the Chai payment app before the crash.
From the market's perspective, 12 years represents a complete end. Given the 4-year cycle of cryptocurrencies, all three cycles would be irrelevant to Do Kwon.
The defense requested a five-year prison sentence.
The defense team played the "sympathy card," emphasizing that Do Kwon had been detained in Montenegro for some time, had a good attitude toward admitting guilt, and had cooperated with the SEC in enforcing the fine.
A seven-year gap is actually enough time for a day-to-day speculative frenzy and financial game to take place around the LUNA token.
Logically, with the founder receiving a severe sentence, the LUNA token would be one step closer to zero. Consequently, the market is flooded with short sellers, and we've seen negative funding rates.
However, the major funds or market makers don't actually need to believe that Do Kwon will be sentenced to 5 years in prison. They only need to take advantage of the uncertainty of this verdict to drive up the price in the opposite direction and target those overly crowded short sellers.
This might explain why LUNA surged on the eve of Do Kwon's trial. The market was certainly not celebrating justice, but rather speculating on the verdict itself.
The crypto market was already lacking in hot topics and was generally weak, so tomorrow's hearing will only create a few localized fluctuations.
From victim to predator
You're awake. It's 2022.
If we were to open LUNA's position distribution chart in May 2022, we would see an even more bleak picture:
The place was crowded with South Korean retail investors who had lost their life savings, crypto funds that had suffered heavy losses, and speculators who tried to buy the dips but were buried. The trading at that time was filled with anger, despair, and irrational self-rescue.
Three years later, the market's microstructure has undergone a complete overhaul.
The victims from back then have long since cut their losses and left the game. Now, sitting across the table are perhaps a completely different group of participants: high-frequency quantitative trading teams, event-driven hedge funds, and speculators who specialize in hunting "junk assets."
For these new players, questions like whether Do Kwon is innocent or whether the Terra ecosystem has a future are not only unimportant but also noise. The only metric they care about is event beta , which is how sensitive asset prices are to specific legal news.
In this context, LUNA's asset attributes have actually been transformed into a legally related derivative note, much like how the fluctuations of certain Meme coins revolve around the actions of a public figure.
This is an extremely brutal maturation in the crypto market, where death or imprisonment can itself be "monetized".
The current trading of LUNA, and even many other tokens that are merely shells, is essentially a disastrous pricing strategy. Major investors are well aware that the fundamentals have already been rendered meaningless. However, as long as disagreements exist, and as long as there is room for bullish and bearish maneuvering, this "empty shell" becomes the perfect trading target.
It could even be said that precisely because there is no fundamental anchor, the fluctuation of token prices is no longer constrained and depends entirely on the release of emotions.
This also confirms the saying that most tokens in the crypto market are actually memes.
Price everything
After tomorrow's verdict, whether Do Kwon hears "5 years" or "12 years," the outcome for the LUNA trading target will likely be the same.
After the event ends, the token will most likely become stagnant again; it's not just bad news that kills market sentiment, but also confirmed good news.
If the sentence is severe, the logic returns to the fundamentals, and the price drops to zero; if the sentence is lenient, the good news is already priced in, and it's a "sell the news" situation, with profit-taking receding like a tide.
To be honest, LUNA is actually a very good observation mirror.
It revealed the technological narrative of algorithmic stablecoins, as well as the extremely mature and ruthless side of this market.
In today's crypto market, even a dead coin and a founder who has confessed can be efficiently repackaged into chips on the gambling table, as long as they still have a sliver of news value.
The liquidity efficiency of the crypto market has evolved to its extreme; it can price anything: emotions, bugs, memes... and of course, a person's freedom and a just trial.
Faced with such extreme efficiency, moral judgment seems somewhat superfluous.
Do Kwon may spend the rest of his life in prison in sorrow, but there is no sorrow in the crypto market, only volatility that has not yet been priced in.
