Never did we think that cryptocurrency investors would have to debate whether TerraUSD (UST) or LUNA would reach $1 first. On Wednesday, the talk of the cryptosphere shifted as the Terra ecosystem crumbled.
Do Kwon, the co-founder of Terraform Labs, revealed his rescue strategy on Twitter as UST’s algorithmic stablecoin plummeted to $0.30.
1/ Dear Terra Community:
— Do Kwon 🌕 (@stablekwon) May 11, 2022
At the same time, LUNA, which was formerly a top-10 cryptocurrency by market capitalization, fell by 98 percent to $0.84 on CoinMarketCap. For comparison, in early April LUNA was trading around $120.
Cointelegraph experts Sam Bourgi, Jordan Finneseth, Marcel Pechman, and Benton Yuan hosted an emergency edition of “The Market Report,” which traditionally airs on Tuesdays, to discuss the situation in the midst of the mayhem.
Before delving into how UST lost its peg, John Bourgi explained the theoretical foundations of algorithmic stablecoins and why they are inherently hazardous. Remember when Luna Foundation Guard made a lot of news for buying Bitcoin? That was a warning sign, according to Bourgi.
Finneseth explained the market psychology of market crashes, as well as why investors should anticipate more misery in the months ahead. Meanwhile, Yuan addressed some possible reasons for who may have orchestrated the BTC sell that sparked the panic within Terra’s ecosystem.
Pechman adhered to his role model’s teachings and contextualized the LUNA disaster within the broader financial system, declaring that crypto and Bitcoin are still the finest investments.
