Investing.com – The troubles of the “stablecoin” and its sister cryptocurrency, the , are obviously not over.
If UST has risen, currently at $0.575, after falling below $0.30 yesterday (when it is supposed to remain at $1), Terra (LUNA) is posting a drop from which it will be difficult to recover, the cryptocurrency having lost more than 99% of its value in recent days…
To understand the ins and outs of this case that is shaking the cryptocurrency market, we invite you to read the following articles:
Below, you will find a summary of the latest information about the troubles of TerraUSD (UST) and Terra (LUNA).
Crypto Arca believes the storm over UST and LUNA will pass
Crypto hedge fund Arca, which is one of several funds likely to suffer the considerable fallout from the sudden and dramatic collapse of the UST, told its partners in a note sent on Tuesday that it believes the stablecoin UST de Terra will eventually regain its value and concluded that the situation created a buying opportunity.
Arca said in the note that it held an ad hoc Investment and Risk Committee meeting to discuss the situation:
“After this analysis, we estimated, and continue to estimate, that the UST will eventually maintain its peg and that a number of attractive opportunities had become available,” Arca CEO Rayne Steinberg wrote to investors. tuesday.
Recall that Arca manages a digital asset fund, in which LUNA is a significant stake.
US senator says TerraUSD ‘failure’ should be considered
Addressing the topic of Terra, Pat Toomey of the US Senate Banking Committee said on Wednesday that algorithmic stablecoins may not pose a risk to the financial industry as fully reserved asset-backed stablecoins would.
“It makes sense that this episode with Terra refocuses attention on stablecoins in general,” Toomey told reporters on a conference call, while defending other asset-backed stablecoins, such as the and the USDCoin.
“And, by the way, failure should be an option,” Toomey said. “It will likely take a few failures in this space for the market to understand what works,” hinting here at an outright demise of UST and LUNA.
Terra’s setbacks contaminate other cryptos
Neutrino USD (USDN), an algorithmic stablecoin within the Waves blockchain ecosystem that functions similarly to UST, slipped below par with the dollar yesterday, directly influenced by TerraUSD’s woes.
The, which is supposed to hold its price at $1, is currently down more than 18% since yesterday at $0.75. The crypto, linked to the USDN, plunges by 40%.
USDN is the Waves protocol stablecoin and works like UST. Users must lock the WAVES token into Neutrino smart contracts to mint USDN, while USDN buybacks destroy the stablecoin to unlock the supply of WAVES, thus balancing supply and demand and keeping the stablecoin at parity.