Terra’s stablecoin UST has depegged from the $1 dollar mark in a string of almost unbelievable events over the previous several days. Many supporters and investors were behind the now-defunct UST coin. Kava Labs, creators of USDX, a stablecoin for the Kava network, was one of them.
On Wednesday, the USDX followed the UST’s collapse and plummeted to depths of $0.47. The stablecoin has since staged a partial recovery, recovering to $0.89 before retreating once again to $0.56.
USDX’s fluctuations, on the other hand, were considerably more complicated to comprehend. USDX’s plunge, at first glance, appeared to be no exception. The Terra stablecoin is backed by a complex formula. In contrast, USDX is collateralized.
Coin’s Founder Claims It Will Repeg
UST tokens were part of USDX’s collateral armor, according to a thread of comments by Scott Stuart. The price of USDX was inevitably harmed by the Terra-linked stablecoin’s fall. Stuart is optimistic that Kava’s stablecoin will rebound soon, despite the fact that it trades at present below $1.
Kava CEO promises that after UST has left its system, the stable token will remain stable.
The Kava community has also voted to start the process of removing UST from Kava Mint, and the executive believes it will take only a little time before USDX reaches $1 again.
In a rather ironic way, Do Kwon, the founder of Terra, assured UST’s restoration shortly after it separated. However, since the CEO’s remarks, Stuart has witnessed significant progress with Kava USDX.
Kava’s USDX is priced at $0.72, up 6.3% in the last 24 hours, as of writing.