When the Terra network’s UST lost its peg to the US dollar last week, the network botched an attempt to save the algorithmic stablecoin by mass-producing LUNA.
UST is an algorithmic stablecoin that is linked to the US dollar and uses LUNA as collateral to maintain its value.
The price of LUNA, Terra’s native token, is now as volatile as low-cap meme currencies, according to statistics, and is currently at 23,716.5 percent of its all-time low set on Friday.
This tactic will fail
TerraUSD (UST), an algorithmic stablecoin, has not regained its peg and is still trading at US$0.1766 at press time.
“Algostable has become a political term serving to legitimize repayment stables by putting them in the same bucket as lending stables like RAI/DAI,” Ethereum co-founder Vitalik Buterin tweeted.
Binance CEO Changpeng “CZ” Zhao responded by saying that this tactic will fail, calling it “wishful thinking.”
The TerraUSD stablecoin is one of numerous Terra stablecoins tied to major currencies.
Instead of using fiat currency reserves, the coins are all algorithmically fixed to their own currencies.
Terra’s governance token luna is used in the algorithm (LUNA.)
At the time of writing, the Luna price has changed by -22.40 percent in the last 24 hours. The market capitalization of Luna was $1,482,022,351.46 USD after the recent price action.
Luna has changed -100.00 percent so far this year. According to CoinDesk’s Digital Asset Classification Standard, Luna is categorized as an Application token (DACS).
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