A disaster for the Terra ecosystem (LUNA). While the project has been struggling for a few days to maintain parity with the dollar for its stablecoin UST, things have accelerated. The price of the latter is plunging this morning, reaching $0.22. The LUNA has also taken a dive never seen before in its history. The situation is as follows:
The UST and LUNA are in complete collapse
UST was in trouble this week, but is now in a catastrophic decline that began on May 9:
The collapse of UST will pose 3 major problems for the ecosystem:
For @ValCryptoast, one of the biggest risks lies in the upcoming European regulation, and the confusion that could be made between “stablecoin and algorithmic stablecoin” pic.twitter.com/Kv9zZ2w5zH
– BFM Crypto (@BfmCrypto) May 11, 2022
While the UST stablecoin is still supposed to be worth one dollar, it just hit $0.22 a few moments ago. A massive collapse, which has never been seen for a stablecoin of this magnitude:
On Twitter, stablecoin creator Don Kwon has made one attempt after another to reassure the community. Since yesterday, he promises that a solution is being developed to bring the UST back to parity with the dollar:
Close to announcing a recovery plan for $UST Hang tight.
– Do Kwon (@stablekwon) May 10, 2022
But we haven’t heard anything about this solution since 8am. What’s more, it’s doubtful that a technical solution will compensate for the damage done to the project’s reputation, which has just collapsed in front of investors’ eyes.
A project collapsing live
As the price of LUNA, the other cryptocurrency of the Terra project, is also logically affected. The token was dismissed from the top 10 most capitalized crypto-assets of the moment. Over the last 24 hours, it loses -89%. A colossal fall, which makes him reach the rank 33 of the ranking, at the time of writing these lines.
While investors’ eyes are glued to the price charts, one wonders how a project of this magnitude can survive this. We will return to this topic today, with an in-depth analysis of the reasons that led to this situation. In the meantime, UST and LUNA seem to continue to fall. Where will they end up