UST stablecoin rate dropped to $0,22
The LUNA token collapsed by 86% in 24 hours, and its price dropped to $4
11.05.2022 - 10:35
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What’s new? Over the past 24 hours, the rate of the algorithmic stablecoin TerraUSD (UST) has been declining to a low of $0,22. As of May 11, 13:00 Moscow time, the coin is trading at $0,45 (according to Coingecko). The cryptocurrency’s collapse began on May 8, when the stablecoin temporarily lost its peg to the dollar.
How did events develop? The exchange rate of the LUNA token has also collapsed by 86% in the last 24 hours, now it is trading at $4. The Terra protocol uses the native token LUNA to secure UST, so their rates are closely linked. Earlier, Terraform Labs CEO Do Kwon explained that the drop in assets’ value was due to removing 150 million UST from the Curve Finance DeFi-protocol to deploy to the 4pool liquidity pool.
On May 9, the Luna Foundation Guard (LFG), a non-profit organization created to support the Terra ecosystem, announced the provision of loans worth $1,5 billion in bitcoin and UST to third parties to support the pegging of its stablecoin to the dollar. On the morning of May 10, 28 205,54 BTC was withdrawn from the LFG’s reserve wallet.
The LFG also reported that the organization plans to raise an additional $1 billion to support UST. The company is in search of capital from large investment funds and market makers. The fund plans to sell LUNA tokens at a 50% discount.
What is Terra? It is an open-source blockchain protocol for creating dApps ranging from DeFi and payment platforms to games and NFTs. The platform also produces algorithmic stablecoins: Terra USD, Terra KRW, and Terra SDT. LUNA is the native token of the blockchain.
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