Controversial stablecoin UST — which is meant to be pegged to the dollar — plummets below 50 cents


Thread author
Staff Member
Jan 24, 2011
The two main tokens from embattled crypto project Terra are now in freefall.

UST, a so-called stablecoin that’s meant to maintain a 1:1 peg with the U.S. dollar, plunged to as low as 31 cents Wednesday. It was last trading at less than 50 cents, according to CoinGecko data.

Sister token luna dived more than 80% to $3.78.

David Moreno Darocas, a research analyst at CryptoCompare, said the situation highlights the “fragility” of algorithmic stablecoins like UST.

“UST has grown to be both an integral and controversial piece of the crypto ecosystem,” he said.
The phenomenon is still relatively new. But UST has grown to become a major player in the crypto economy, with a circulating supply of 16 billion tokens.
Investors are now closely watching for how Luna Foundation Guard responds to prop up its ailing stablecoin. Kwon said Tuesday he was “close to announcing a recovery plan” for UST. “Hang tight,” he tweeted.

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