Terra's UST On Edge of Losing Peg as Crypto Markets Dip
2 min read

Terra’s UST Goes On Edge of Losing Peg as Crypto Markets Dip

By News Desk

Terra’s UST was briefly in danger of losing its peg as crypto markets continue to dip, putting pressure on the reserve assets that back the stablecoin.

As an algorithmic stablecoin, UST is designed to maintain price and supply stability by being pegged to reserve assets.

As Bitcoin and the broader crypto markets bled over the weekend, UST’s Tether pair, its most voluminous pair, saw a 14% drop for a brief moment following a major dump worth $300 million on Curve and Binance.

According to decentralized finance (DeFi) expert Route 2 FI who was following the developments, a massive UST sell-off on Curve, plus negative rumours on Twitter led to a $2 billion withdrawal of UST on Anchor Protocol. This caused LUNA, which partially backs UST, to tank and ultimately cause the unpegging.

“The peg will restore IMO, there is enough money in the system to back this up. Was it a coordinated attack? Maybe, idk. But nevertheless, this was an important test for the system,” he said.

While an exact explanation of what happened likely won’t come to light, Terra founder Do Kwon appears to believe it was a coordinated attack, rather than a random hiccup triggered by market volatility. Kwon retweeted the following tweet from blockchain business lawyer Caetano Manfrini:

“Today’s attack on Terra-Luna-UST was deliberate and coordinated. Massive 285m UST dump on Curve and Binance by a single player followed by massive shorts on Luna and hundreds of twitter posts. Pure staging. The project is bothering someone. [Terra is] on the right path!”

LUNA remains down 15% on the week, but so is virtually the entire list of top 100 cryptocurrencies as markets weather a nasty correction.

UST has mostly stabilized and is still the tenth biggest crypto asset in the world, and the second biggest stablecoin after Tether in terms of market cap.

Newsletter Inline

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Latest Posts

What is a rug pull
Crypto Rug Pulls: How To AVOID Them and Keep SAFE!
What is a rug pull

Crypto Rug Pulls: How To AVOID Them and Keep SAFE!

August 13, 2022 15 min read
What is a layer 1 blockchain protocol
What is a Layer 1 Blockchain Protocol?
What is a layer 1 blockchain protocol

What is a Layer 1 Blockchain Protocol?

August 11, 2022 22 min read
Curve fi
Curve Finance Review: Is Curve the Backbone of DeFi?
Curve fi

Curve Finance Review: Is Curve the Backbone of DeFi?

August 11th, 2022 17 min read
Bitstamp Review
Bitstamp Review 2022: Secure and Simple Cryptocurrency Exchange
Bitstamp Review

Bitstamp Review 2022: Secure and Simple Cryptocurrency Exchange

August 6, 2022 27 min read
Phemex Review
Phemex Review 2022: Secure Crypto Exchange for Serious Traders
Phemex Review

Phemex Review 2022: Secure Crypto Exchange for Serious Traders

August 2, 2022 33 min read
How to add Polygon to Metamask
Connecting the Polygon Network to Metamask
How to add Polygon to Metamask

Connecting the Polygon Network to Metamask

August 1, 2022 11 min read
bitget review
Bitget Exchange Review 2022: Growing Crypto Exchange with BIG Potential!
bitget review

Bitget Exchange Review 2022: Growing Crypto Exchange with BIG Potential!

July 29, 2022 32 min read

Related Posts

Curve fi
Curve Finance Review: Is Curve the Backbone of DeFi?
Curve fi

Curve Finance Review: Is Curve the Backbone of DeFi?

August 11th, 2022 17 min read
Bitstamp Review
Bitstamp Review 2022: Secure and Simple Cryptocurrency Exchange
Bitstamp Review

Bitstamp Review 2022: Secure and Simple Cryptocurrency Exchange

August 6, 2022 27 min read
Phemex Review
Phemex Review 2022: Secure Crypto Exchange for Serious Traders
Phemex Review

Phemex Review 2022: Secure Crypto Exchange for Serious Traders

August 2, 2022 33 min read
Bybit Review
Bybit Exchange Review: Dream Destination for Derivatives Trading?
Bybit Review

Bybit Exchange Review: Dream Destination for Derivatives Trading?

July 24, 2022 37 min read
Euler Finance Review
Euler Finance Review 2022: Is Euler the Next Generation of DeFi Lending?
Euler Finance Review

Euler Finance Review 2022: Is Euler the Next Generation of DeFi Lending?

July 25th, 2022 36 min read
Top Blockchain Conferences in 2022
Crypto Conferences for 2022 And Beyond
Top Blockchain Conferences in 2022

Crypto Conferences for 2022 And Beyond

July 21, 2022 15 min read
Guild of Guardians Review
Guild of Guardians Review 2022: Top Free-To-Play Mobile Crypto Game!
Guild of Guardians Review

Guild of Guardians Review 2022: Top Free-To-Play Mobile Crypto Game!

July 19, 2022 22 min read