- For the second time in three days, TerraUSD, UST has lost its peg to the dollar, falling to a low of $0.6841 on Monday, data from CoinMarketCap shows.
- LUNA has fallen by more than 45% in the last 24 hours, as data from CoinMarketCap shows. UST is one of the so-called algorithmic stablecoins, which works with LUNA to maintain a price of 1 dollar.
For the second time in three days, TerraUSD, UST has lost its peg to the dollar, falling to a low of $0.6841 on Monday, data from CoinMarketCap shows.
Since UST has decoupled from its sister token, LUNA has dropped more than 45% in the last 24 hours, as data from CoinMarketCap shows. UST is one of the so-called algorithmic stablecoins, which works with LUNA to maintain a price of $1 using a set of on-chain minting and burning mechanisms. What this does, in theory, is that traders can always trade $1 of UST for $1 of LUNA which is floating in price and is meant to serve as a kind of UST price buffer.
Now, the fall of LUNA puts its market cap below that of UST, causing the foundation of the entire UST mechanism to wobble, and this could result in some users no longer being able to redeem $1 worth of UST for 1 Moon dollar.
Notably, today’s de-pegging came after the Luna Foundation Guard announced that $1.5 billion of its massive bitcoin holdings would be “lent” to professional market makers to proactively advocate pegging the UST dollar.
Finally, UST’s earlier loss of its $1 peg this weekend saw the token drop to $0.985 on Saturday, not the first or biggest de-pegging case UST experienced, but, it did mark the first time for the algorithmic currency to drop below $1 since it delved into a highly publicized bid to build bitcoin reserves. At the time of writing, UST is trading at a value of USD 0.7893, according to data from CoinMarketCap.
