As UST continues to deviate from the dollar peg, cryptocurrency luna sinks to zero dollars.
Hyy everyone!
Hope you all are good,
1st October,2022
lets start,
The contentious stablecoin TerraUSD's sister token is now essentially worthless.
According to data from CoinGecko, the value of Luna fell to zero on Friday, a shocking decline for a cryptocurrency that formerly reached over $100.
The collapse of the contentious stablecoin project Terra led to a collapse in the cryptocurrency market that saw billions of dollars' worth of value disappear in a single day.
The TerraUSD or UST is meant to be tied exactly to the US dollar. However, UST has lost its peg and was trading at about 12 cents on Friday, according to information from CoinGecko.
Despite the continued problems with the stablecoin TerraUSD, which have sparked panic in the cryptocurrency market, Bitcoin staged a recovery on Friday, rising beyond $30,000. Investors probably took a, the largest stablecoin in the world, had reclaimed its dollar peg after briefly falling below $1.
The largest cryptocurrency in the world, bitcoin, was last valued at $30,046.85, according to statistics from Coin Metrics, an increase of 5.3% after it earlier this week fell to levels not seen since late 2020.
The value of the virtual currency has fallen more than 15% for the week, though.
UST: What is it?
Luna and UST are connected. As an algorithmic stablecoin, UST is said to have a $1 peg that is controlled by underlying code. This differs significantly from other stablecoins like tether and USDC, which are backed by tangible assets like bonds in the real world. UST has no reserves in the real world.
To keep prices stable, the UST algorithm uses a complicated system of token minting and burning. To keep the dollar peg, a portion of the associated cryptocurrency luna is destroyed to produce a UST token.
However, UST was put to the test by the incredibly volatile market, and it was unable to keep the peg.
The Terra blockchain, which supports UST and luna, stopped processing transactions twice in less than 24 hours, which has caused additional issues.
The largest cryptocurrency exchange in the world, Binance, delisted UST and luna on Friday for a while.
Although the company "always attempts to stay impartial," Binance CEO Changpeng Zhao stated that it "will break that rule this time."
However, trading in UST and luna had started up again on Binance as of 10:30 a.m. ET.
It follows Terra's announcement that it will continue checking new blockchain transactions but would stop allowing direct network transfers. Users are urged to use alternative channels in place of this one.
In addition to the UST controversy, crypto markets have also faced a number of other challenges, such as increasing inflation and interest rate increases that have resulted in a sell-off on international stock markets that has trickled down. Stock market fluctuations and cryptocurrency price changes have been linked.
"The Luna/UST crisis has severely impacted market confidence. Most cryptocurrencies have decreased by [greater than] 50% overall. Taking everything into account and global inflation and growthThis is not good news for cryptocurrency in general, according to Vijay Ayyar, Luno's vice president of corporate development and worldwide.
Even the significant bitcoin rebound might not last.
"In such situations, bounces of 10% to 30% are typical. These are typically rebounds in bear markets that test earlier support levels as resistance, according to Ayyar.
