![]() Please note Terra Stablecoin Peg Slips Below $0.70-Despite Loan From Bitcoin Reserves Here’s one comment that actually made sense: “ Which idiot thought that stablecoins backed by anything other than USD was a good idea?“ imagine buying the dollar at a 20 percent discount $UST arbitrage opportunity of a life time.$LUNA wow! never expected $UST to do this, Terra luna going down HARD! still when the bear market is over everything will work itself out & I really think this will be the project that will come out on top and be in the top 5.Buy UST with any other stable and take a profit from the difference tomorrow everything will be 1:1.the algorithm will catch up with the market. The comments on CoinMarketCap are more than a bit amusing. The chart above shows the difference between theory and practice. This nuance will make it possible to form a reliable interest rate.Ģ0% interest. Additional and steady income appears through rewards in PoS chains, which maintain their stability due to commissions and inflation. Anchor is a lending protocol that promises a 20% return on UST savings. In theory, if either Luna or TerraUSD deviates too far traders will burn one in exchange for the other.Īlso in theory TerraUSD’s monetary policy scales nearly without limits, thereby helping DeFi (decentralized finance) projects reach their full potential.įinally, users can gain passive income using TerraUSD with the Anchor protocol’s stable interest rates. If the price of TerraUSD falls below $1, traders can “burn” the coin in exchange for $1 worth of new units of a cryptocurrency called Luna. The algorithm is based on faith and arbitrage. Officially, it’s backed an algorithm that clearly doesn’t work. Many readers may be wondering what TerraUSD is backed by. TerraUSD was supposed to be pegged to the US dollar. Stablecoins are pegged to something, typically $1 but it could be anything. Stablecoin TerraUSD chart courtesy of CoinMarketCap
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