Stablecoin TerraUSD (UST), a digital token that is pegged 1:1 to the US dollar, has dropped to 30 cents as traders waited for a recovery plan promised by its founder. Despite previously dominating in terms of market capitalisation, its value, this week, fell below $0.70.
UST regained some ground later but on May 11, 2022, the token’s price dropped as low as $0.3062. It was last trading above 40 cents, according to the price site CoinGecko.
Decline in the stablecoin’s value affected cryptocurrency markets and stock markets.
Do Kwon, co-founder,Terraform Labs said that they were close to announcing a recovery plan for UST.
UST is an algorithmic stablecoin whose value is derived by complex processes, but it is linked to another paired token called Luna which is free floating.
(With inputs from Reuters)