Terra (LUNA) Collapses 14% As UST Briefly Loses Its Pin
Terra’s largest stablecoin briefly lost its pin. Proponents argue it was a coordinated attack, but critics disagree
The price of Terra (LUNA) has fallen by more than 14% in the last 24 hours, making it the worst performing cryptocurrency among the major altcoins.
It has now fallen almost below Terra’s original UST stablecoin. The two cryptocurrencies are currently valued at $21.9 billion and $18.9 billion.
On Saturday, Terra briefly lost his link after someone dumped $300 million worth of UST tokens on Curve and Binance. DeFi expert Route 2 Fi (@Route2FI) is convinced that the peg will be restored because there is “enough money” in the system to back it up.
Image by coinmarketcap.com
Some “LUNAtics” believe it’s a… “coordinated attack” that was orchestrated by a single player to damage the popular blockchain project.
“Bitfinex’ed,” the pseudonymous blogger and prolific critic of the cryptocurrency industry, noted that revoking tokens you own “fair and square” isn’t actually a coordinated attack.
Terra co-founder Do Kwon dismissed these concerns on Twitter, claiming that he “likes chaos”.
However, Kwon was mocked by some Twitter users for claiming that the 62% “other” portion of the now-deleted pie chart was a single entity to support his conspiracy theory. Image by twitter.com
UST has already become and surpasses the third largest stablecoin by market value. However, some critics warn that algorithmic stablecoins are inherently vulnerable because they are not backed by dollars. It uses a complex arbitration system to maintain its linkage.
After acknowledging the risk of the two-coin system, Terra recently moved to add Bitcoin reserves as well. In this way, it aims to ensure the stability of the stablecoin during market turmoil.
Earlier this week, Luna Foundation Guard (LFG) announced another $1.5 billion Bitcoin purchase, but it failed to move the market.