The crypto winter could be claiming more casualties among the stablecoin camp. The depegging of TerraUSD (UST) on May 10 triggered market selloffs, and now Tether (USDT) appears to be losing its footing. It has slipped against the U.S. dollar.
The algorithmic stablecoin UST, as the name implies, is algorithmically backed. Terra (LUNA), the ecosystem's corresponding token, sank over 95% since May 10, while UST continues to languish around the $0.50 mark.
Cointelegraph’s resident experts shared their explanations for why UST crashed in a Market Report video yesterday. The plan for the TerraLabs’ algo stablecoin continues to roll out but the stablecoin is struggling.
Data from Cointelegraph Markets Pro confirmed that various stablecoins have shown greater volatility than usual. The world’s largest stablecoin, Tether USDT traded under $0.99, Gemini GUSD exceeded $1 while USD Coin (USDC) also appreciated.
Paolo Ardoino, CTO of Bitfinex and Tether, sheds light on the difference between stablecoins and their algorithmic counterparts:
For UST to work, Ardoino shared that you would need 3x the investment, or over $50 million:
More sauce https://t.co/w51pFcLJey
In earlier tweets, Ardoino reminded crypto enthusiasts that “Tether is honoring USDT redemptions at 1$"–as he spread calm among the industry. For crypto veterans such as Whale Panda, the distinction between stablecoins is clear cut; the Tether FUD is “peak FUD”:
People confusing $USDT and $UST and panicking.People don't understand the difference between an under collaterized algorithmic stablecoin and a backed stablecoin.Panic dumping $USDT for $USDC and plain old $USD.Peak fud time.Warning: this post will attract "Tether truthers"
The price of USDT has recovered from its very
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