Terra (LUNA) is in an approximate situation. As reported in the crypto news yesterday, TerraUSD (UST), a stablecoin on the network, lost its link to the dollar. This caused further chaos that seemed to calm down for a while yesterday. But now it’s hit again!
1 UST drops to $0.68
Due to the chaos in the market and the situation regarding UST, the stablecoin ended up in heavy water. Yesterday, UST briefly fell to $0.98, prompting the Luna Foundation Guard (LFG) to lend $1.5 billion in bitcoin (BTC) and UST to external parties. This with the aim of providing liquidity and thus supporting the value of UST.
This has had little effect so far, as it turns out when we look at the chart of the stablecoin. So where UST should ideally have a value of $1 at all times, even in times like these, stability is hard to find:
Although the value seems to have stabilized somewhat again, the situation has not yet been resolved. Terra co-founder Do Kwon leaves on Twitter “to put in more capital” and “steady lads,” which means something like “Hold on guys.”
Deploying more capital – steady lads
— Do Kwon 🌕 (@stablekwon) May 9, 2022
Terra (LUNA) collapses completely
The pain can also be seen on the chart of LUNA, the cryptocurrency that allows users to create UST. Users can destroy their LUNA and then get UST in return, and vice versa. Thus, the value of UST should continue to trade at $1 due to arbitrage opportunities. Because this is not going well, investors seem to be losing confidence in the project.
Compared to 24 hours ago, LUNA is even 50% down! The cryptocurrency is trading at $31, where it traded around $61 yesterday. In short, tough times for the Terra network. Hopefully the issues will be resolved soon.
