Luna

The prices of inter-linked LUNA and UST tokens on the popular Terra network tanked this week, causing leading exchanges, including Binance, ...

Its value should come from its utility in the wider economy and usefulness to everyone. He also concluded he was “bullish on UST once the dust settles down.” While it may be the case (in theory) that stablecoins can experience price volatility and even potentially fail, that potential also puts them in a similar risk category to other digital assets. It’s important to remember that national fiat currencies themselves are essentially algo-backed stablecoins, with their own values based on demand and issuers’ reputations. The whole point of a “stablecoin” is to reduce the risk of volatility altogether or even eliminate it. Blockchain developer Emin Gün Sirer pointed out that stablecoins of all types and generations have suffered issues with their values decoupling from the fiats they represent. Its operators also say the network has earned processors more value in transaction fees than any other blockchain, apart from BTC and Ethereum (it would be tough for anyone to knock either of those fee behemoths from their perches). They rightly cry foul when their positions disintegrate, yet exist on these platforms in the hope of making exponential gains and getting rich quickly. The prices of inter-linked LUNA and UST tokens on the popular Terra network tanked, leading exchanges including Binance to suspend transactions in those assets. Exchanges hide behind the same glitches, disabling and enabling transactions on their platforms. The following Twitter thread describes what happened and what could have happened. The market is struggling to find a stablecoin it can trust as a buffer against other digital asset volatility, while exchanges once again switched off services as trouble loomed—protecting themselves, but not users. It was the second time UST had decoupled from the U.S. dollar in a few days.

(Bloomberg) -- From borrowing and lending platforms to synthentic equities to simply trying to build a stable proxy for the US dollar, ...

In the latest example of the crypto world imitating traditional finance, backers of the TerraUSD algorithmic stablecoin (known as UST) are trying to raise about $1.5 billion to shore up the token after it crashed from its dollar peg, according to the founder of a firm that was approached about the deal from the Luna Foundation Guard, a consortium set up to help UST maintain a $1 value. For Stephane Ouellette, chief executive of FRNT Financial Inc., even a 50-cent value for UST seems odd. “The selling pressure drags the price further down on BTC, and then you have a whole loop, if you will. Yet skepticism is rampant that Terra will be able to line up enough financing to save its stablecoin from a death spiral. The last-ditch effort to save an insolvent company is so fraught with risk that modern Wall Street firms tend to avoid getting involved, though it’s been seen more commonly in recent years in the sketchy corners of the penny stock market. That spot price is a swiftly moving target, however.

Users discussed losses ranging from a few thousand dollars to their life savings as the forum shows the painful side of crypto investments.

And researchers who study the effects of a stock downturn say similar effects are experienced among crypto traders. One member of the forum, No-Forever2056, said in a post that they had thought about cashing out when Luna was trading at $100 in March and early April, but held off to see if they could earn enough for a down payment on a house. I will lose my home soon,” the user wrote. “Well now even if I want to get out, I can’t as all my luna was locked staking,” No-Forever2056 wrote. I didn’t get out because I got greedy and hoped it would go up more,” said No-Forever2056, who declined to give their real name. TerraUSD (UST), an algorithmic stablecoin that should always be worth $1, lost its peg to the U.S. dollar last week and has dropped to as low as 30 cents.