Cryptocurrency Luna Now Almost Worthless After Controversial Stablecoin It Is Linked To Loses Peg

Luna, the sister cryptocurrency of controversial stablecoin TerraUSD, has collapsed to nearly $0. From a report: TerraUSD, or UST, has been dragged into the spotlight in the last few days after the so-called stablecoin, which is supposed to be pegged one-to-one with the U.S. dollar, fell sharply below the $1 mark. UST is an algorithmic stablecoin which uses code to maintain its price at around $1 based on a complex system of minting and burning. A UST token is created by destroying some of the related cryptocurrency luna to maintain the dollar peg. Unlike rival stablecoins Tether and USD Coin, UST is not backed by any real-world assets such as bonds. Instead, the Luna Foundation Guard, a nonprofit created by Terra's founder Do Kwon, is holding about $3.5 billion of bitcoin in reserve. But in times of market volatility, such as this week, UST is being tested. Its peg has been lost and now investors are rushing to dump the associated luna token. Luna's price has plunged from around $85 a week ago to trade at around 3 cents on Thursday, according to data from CoinGecko, making the cryptocurrency almost worthless. The Luna token was trading at $121 last month. At the time of publication, Binance, the world's largest cryptocurrency exchange, has delisted Luna Futures-USDT margined contract.

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