Luna Crypto Crash: How UST Broke and What’s Next for Terra

Pedestrians walk past a display of cryptocurrency Bitcoin on February 15, 2022 in Hong Kong, China. Crypto project Terra is buying billions in bitcoin to support UST, a controversial stablecoin. The percent change in trading volume for this asset compared to 7 days DotBig ust crypto ago. The percent change in trading volume for this asset compared to 24 hours ago. Join a diverse, rapidly growing Web3 ecosystem with projects across DeFi, Gaming, and NFTs. Own 30+ cryptoassets on an easy-to-use platform, and share in the knowledge of 25m+ users.

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Every upcoming contender will need to earn its place among the stablecoin elite. They will get tested, as they should, and the fittest, most eloquently designed will survive, which in the end will make the whole ecosystem more efficient, secure and resilient.

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But UST’s crash put another dent in the overall market, most centrally because Terra creator Do Kwon had bought billions worth in Bitcoin as a safeguard for UST. When he and the Luna Foundation Guard deployed more than $3 billion to defend the peg, in doing so he caused downward pressure on the market, causing other large investors to sell off their Bitcoin shares. Bitcoin hit its lowest point since December 2020, and Kwon’s ploy to save UST was unsuccessful.

  • The new plan will see the current Terra blockchain renamed to Terra Classic, while the new chain will simply go by Terra.
  • Michael Novogratz, the billionaire founder and CEO of Galaxy Digital who got a giant Luna shoulder tattoo in January, has not tweeted since May 8.
  • The same month, President Biden’s working group called for “urgent” action to regulate them.
  • These actors preyed on the relatively shallow liquidity of Curve pools backing the TerraUSD peg to other stablecoins and moved to capitalize on arbitrage opportunities.
  • The remaining reserves will be used to „compensate remaining users of UST, smallest holders first.“
  • The value of stablecoins of this type is based on the value of the backing currency, which is held by a third-party–regulated financial entity.

This heat pump enthusiasm is happening against the backdrop of instability in the natural gas market, prompting higher winter heating bills worldwide. The Energy Information Administration’s recent Winter Fuels Outlook anticipated a 19% increase in natural gas prices this year as compared with last. The Biden administration announced $9 billion in funding Wednesday to improve home efficiency, which could help support the installation of up to 500,000 heat pumps. With winter approaching and utilities warning of gas shortages, there are some major challenges facing the technology that money can be used to tackle. But Coinbase saw “strong growth” in subscription and services revenue, aided in part by rising interest rates. It’s quite possible there’ll be enough of them that they’ll take control in one or both chambers in Congress.

Seigniorage-style/algorithmic stablecoins (not backed)

However, he expressed optimism that advertisers would move even more of their budgets to streaming once the worst of the current crisis is over. “We expect to emerge from the current advertising downturn stronger and in a better position than ever,” Wood said. Affected employees will be given a minimum of 14 weeks‘ severance pay, according to Forex news the memo, as well as other assistance such as immigration support for workers in the U.S. as visa holders. The company’s revenue and payment volume tripled from the start of the pandemic as the „world rotated overnight towards e-commerce,“ the Collison brothers‘ memo said. But Stripe made mistakes mistakes leading into 2022, they acknowledged.

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„The question in our minds becomes, does what happened to UST spread to other stablecoins?“ he said. „If big whales found a playbook here that works to attack UST, we worry they may reuse Dotbig altcoin that playbook in other areas of the market.“ Traders tried to take advantage of arbitrage, exchanging 90 cents worth of UST for $1 worth of luna, but then a speed bump appeared.


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