Three years after the implosion of the Terra ecosystem, the algorithmic stablecoin TerraUSDClassic (USTC) remains far from its intended $1 peg, raising questions about the viability of algorithmic stablecoins and the future of the beleaguered project.
The project secured funding from prominent crypto exchanges like Binance and Coinbase. However, in May 2022, UST lost its peg, triggering a catastrophic crash that wiped out $45 billion from the crypto market in a single week.
This is Do Kwon.
Net worth over $3 billion.
Founder of Luna and UST, whose collapse wiped out $45 billion in one week.
Here’s the untold story behind it 🧵👇 pic.twitter.com/I4Db8k4NXk
— Rasgard (@rasgard_lodbrok) July 7, 2024
The TerraUSD stablecoin was subsequently rebranded as TerraUSDClassic (USTC), and Terra (LUNA) was renamed Terra Classic (LUNC). Do Kwon, the founder of Terraform Labs, announced a new Terra (LUNA) token to compensate users affected by the crash.
Three years later, USTC has yet to reclaim its $1 peg. According to CoinMarketCap data, the stablecoin is currently priced at $0.01681, up almost 1.5% in the past 24 hours. It holds a market cap of $93 million, a stark contrast to its peak valuation of $18.77 billion.
Down almost 99% from its intended $1 price, USTC appears to have been abandoned, with little chance of recovery. In June, Terra CEO Chris Amani stated that the community would need to take ownership of the chain, suggesting that the project’s future lies in the hands of its users.
“I believe there are a couple teams and devs who want to do this and you should be seeing information in the forums soon.”
Furthermore, the TradingView chart indicates a relative strength index (RSI) below 50, signaling bearish control over USTC’s price action. However, the gradient of the line suggests a potential for higher prices in the near future, should bullish investors capitalize on the discounted prices.
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