TerraUSD (UST) Stablecoin Drops Below $1
In the past few days, UST fell below its $1 peg, dropping as low as $0.65 on Monday. TerraUSD (UST) was developed by Terraform Labs based in Singapore and was designed to track the price of the USD without any cash reserve. Using Bitcoin (BTC) as its reserve currency. UST is earned or created through a smart contract that burns Terra (Luna) for its equivalent in UST- while new Luna is minted by burning UST and other Terra supported stablecoins. This aims to maintain a price of $1.
In reaction to the significant price drop on Monday, the Luna Foundation Guard drained its $1.5 billion bitcoin reserve to buy a significant amount of UST and purchased/depoyed 28,205 Bitcoin in attempt to defend the $1 peg.
