LUNA and TerraUSD (UST): A Myth Sold to the Crypto World as a ‘Stablecoin’

The narrative surrounding ‘Stablecoins’ as the coins that will save the day whenever Bitcoin and altcoins experiences a downtrend is gradually wearing off following the plunge of one of the most popular stablecoin — TerraUSD (UST).

Terra Luna, UST
Terra | Image: Optimisus

Who would have thought that LUNA and UST will one day cause this level of catastrophe among investors, developers and the Government?

Since its collapse, many theories have been formed as a result of many trying to make sense of what could be referred to as a ‘watershed moment’ that a lot of investors may never recover from.

The disheartening part of it all is that no amount of theories, speculations or investigations can bring back the lives of those that were lost due to this crisis.

One question remains, how and what will the crypto elites and regulators do to put a stop to the porosity of the cryptocurrency space?

It is almost so unbelieve to note that the 1.3 trillion crypto sphere of fewer than ten years accounts for over 19,000+ projects, 100+ ecosystems and counting. Most of these projects are without value or use cases.

The cryptocurrency is increasingly becoming a hub for desperate money-mongers building projects just for the sake of having a piece of the cherry on the cake, if not all the cherries.

A fewer portion of crypto enthusiasts who truly want its longevity is calling for a structure to avoid this incessant scam, rug-pull and unexpected occurrences such as LUNA and UST.

At this rate, the vision for mass adoption may seem far-fetched if nothing is done to curb the height of loopholes and security breaches that have become the order of the day.

Exchanges also have a role to play in ensuring that they carry out their due diligence religiously before listing any project. They need to be more intentional about the services they offer to the public, fully having it in mind that most of these investors trade on trust.

This implies that some of their trade with a particular exchange for the sake of the longstanding faith they have built for the brand.

In a situation where the founder of Binance and one of the most influential people in the space — Changpeng Zhao (CZ) tweets that he did not invest in TerraUSD because he did not understand it makes one wonder how come this alleged ‘stable coin’ was listed on his exchange.

Source: Twitter

At the time of writing, UST’s price is $0.08807 as per CoinMarketCap. Analysts predict that the UST pool of liquidity will drain out to zero. With the present predicament, DO Kwon and his team will need at least $340 trillion to remedy the situation, representing 11x the US dollar deficit.

Source: CoinMarketCap

Meanwhile, LUNA trades at $0.0001405. While some advise that the solution for LUNA will be to use a hard fork, CZ and 90% of the Luna board votes participants think otherwise. Instead, the board voted for a massive burn which if it is conducted will result in the token losing about two more zeros.

On the other hand, Tether USDT is one of the stable coins struggling and has lost its $1 peg against the US dollar to $0.993. USD Coin (USDC) is also wavering amid the storm — one minute, it is $0.9999 and the next minute, $1.

BUSD is not spared in the waves of the ocean. Interestingly, CZ seems too busy tweeting and retweeting to save what’s left of the reputation of stable coins. At this point, the summary of it all is that: let the best stablecoin remain ‘stable.’