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:
Figure 1: UST stablecoin’s precipitous fall this morning
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.
Figure 2: LUNA loses nearly -90% in one day
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
