UST momentarily missed its peg, prompting the Luna Foundation Guard to lend $750 million out of its Bitcoins holdings.
The Terra LUNA/USD blockchain's token fell 56% in 24 hours when its stablecoin, TerraUSD UST/USD, dropped its pegs for the 2nd time within 48 hours. What appeared: LUNA went from an overnight high of $64.62 to an overnight bottom of $28.03, as per statistics. Since this instance, LUNA has shed over 65 per cent of its value.
The value of the tokens fell when the blockchain's algorithmic stablecoin UST broke its peg for the second time in three sessions. According to certain sources, UST has dropped as lower as $0.65 on Coinbase Global Inc. It is Significant because: The token mechanisms of UST are designed so that investors may exchange $1 of LUNA for $1 of UST, guaranteeing that the stablecoin is always tied to the dollar. Due to LUNA's dramatic depreciation, its market capitalisation has fallen below that of UST, and traders are unable to redeem UST for LUNA at its prior 1:1 parity.
Now, what's next: So over weekends, UST momentarily missed its peg, prompting the Luna Foundation Guard to lend $750 million out of its Bitcoins holdings.
On-chain evidence confirms that Terra's $1.3 billion in Bitcoin holdings have been completely depleted.
Notwithstanding the capital injection, UST has yet to restore its peg to the US dollar, and the protocol's ecology remains in peril.
"While UST purchases and sales are not significant right now, we believed it was beneficial to have funds ready to deploy in the present market," Terra founder Do Kwon said.
"As economies rebound, we intend to have the mortgage repaid in Bitcoin, boosting the number of our entire holdings."
