LUNA Crypto Left Worthless Following UST Stablecoin Loses Its Peg

Luna, which is the existing crypto for the Terra network besides its stablecoin TerraUSD, has subsided to the $0 mark.

Even the TerraUSD (UST) witnessed a break of its one-to-one Dollar peg.

It is to look forward to how Terra attempts to save the Luna coin and Its stablecoin UST.

Luna, Terra’s native token, has almost subsided to the $0 mark. TerraUSD (UST) has been in the limelight lately following the instance when the stablecoin that needs to maintain a one-to-one peg with the US Dollar broke its peg.

UST is an algorithmic stablecoin that utilizes code to maintain its price at around $1 peg based on a complex system of burning and minting.

Terra network’s native token is LUNA, which is utilized to keep an algorithmic stablecoin peg to the US Dollar. Terra facilitates the users with an arbitrage opportunity by enabling them to burn LUNA governance tokens to dilute the supply of UST and keep it stably pegged.

UST is not supported by any real-world asset like bonds, which is the case with other competitors like USD Coin and Tether. Rather, the Luna Foundation Guard (LFG), a non-profit created by Do Kwon, Terra’s founder, currently holds around $3.5 Billion Bitcoin (BTC) as reserves.

UST is at the test right now if we talk about market volatility. Its peg is broken, creating a huge fear, uncertainty, and doubt regarding the Terra ecosystem. The investors are rushing to dump the linked luna token.

Luna witnessed around $85 a week ago, and it fell to $4 on Thursday. And looking at such a huge downfall, the Luna token almost looked worthless.

Binance Delists LUNA And Stablecoin UST

Recently Binance, the prominent cryptocurrency exchange, highlighted that the Terra network is experiencing congestion and slowness. And that as a result, there is a high volume of pending Terra network withdrawal transactions on the exchange, a sign that the investors are attempting to sell Luna.

There are also concerns that the LFG might have to sell off its bitcoin reserves to support the stablecoin’s peg.

Bitcoin is currently trading at $30,242. On Thursday reached $27k, which is yet a downtrend in its performance.

And at the time of writing, the Luna coin is trading at $0.00005733 with a market cap of $374,366,057 and is down by around 99% in the last twenty-four hours.

Additionally, now Binance is moving forward with its decision to halt the trading of Terraform Labs’ Terra (Luna) and TerraUSD (UST) tokens on its platform following this largest breakdown of the space.

This was indeed a massive plunge for Luna and even the stablecoin. It is to look forward to what Terra network attempts now to save it and the native stablecoin UST.