The algorithmic stablecoin of the Terra ecosystem, TerraUSD (UST), has again lost its peg to the US dollar amid the collapse of the cryptocurrency market.
On the night of May 10, the price of the asset fell below $0.62.
Due to the incident, Binance temporarily froze the withdrawal of funds in the Terra blockchain. Users noticed an empty order book on the platform.
TerraUSD is one of the largest dollar-pegged stablecoins. According to CoinGecko, its capitalization exceeds $16 billion. Since the LUNA native cryptocurrency burn mechanism is used to issue UST, the price of the two assets is highly correlated. However, for this mechanism to work, there must be demand for the target asset. In the case of UST, the platform that provides such demand is Anchor, the largest protocol of the Terra ecosystem. The latter pays more than 19% per annum on a deposit in UST.
