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What about TerraUSD?
TerraUSD (UST) is a digital asset that was launched in 2020 and is pegged to the U.S. dollar. It is known as an algorithmic stablecoin, which means that it uses an algorithm to maintain a stable value against the USD. This stability is achieved by adjusting the supply of UST in circulation based on market demand.
Unfortunately, the stability of UST was called into question in November 2021 when the project experienced a significant price drop. This resulted in a multibillion-dollar selloff across the crypto markets, as investors rushed to sell their UST holdings.
As a result of this price drop, UST was delisted from many major cryptocurrency exchanges. This essentially shut down the project for good, with the UST blockchain being turned off.
The reason for the collapse of UST is still uncertain, but it highlights the risks associated with algorithmic stablecoins. These coins are not backed by a physical asset or reserve, and their stability relies solely on the algorithm used to manage their supply. This makes them more susceptible to market volatility and can lead to sudden price drops.
While UST initially showed promise as an algorithmic stablecoin, its collapse and subsequent delisting from major exchanges serve as a cautionary tale for investors looking to invest in similar assets. It is important to thoroughly research and understand the financial risks associated with any digital asset before investing.
Buy TerraUSD Without Any Hassle
TerraClassicUSD (USTC, UST, or Terra stablecoin), an algorithmic stablecoin tied to the US dollar, was introduced in September 2020 through a collaboration with Bittrex Global, a well-known cryptocurrency exchange. It offers the following unique features:
Enhanced Scalability. TerraUSD is a stablecoin that maintains a value equivalent to the face value of minted stablecoins. Its monetary policy enables limitless scalability, empowering DeFi projects to realize their full potential.
Easy Exchange. Within the Terra ecosystem, all stablecoins share liquidity, facilitating seamless conversion of TerraUSD to TerraKRW (a stablecoin pegged to the Korean Won reserve) with minimal fees.
Passive Income Potential. UST holders can earn passive income through the Anchor Protocol's stable interest rates. Anchor, a decentralized savings protocol, guarantees a 20% return on UST savings. Additionally, PoS chains provide rewards through commissions and inflation, ensuring a predictable interest rate.
Interoperability. Terra stablecoins connect various blockchain ecosystems through the Dropship bridge protocol. This integration enables seamless interaction with diverse DeFi and DEX trading platforms, as well as facilitates asset transfers between different chains. The value of TerraUSD is determined by the supply and demand of LUNA, while the Dropship protocol ensures scalability by maintaining a stable UST cost.
Changelly offers a live TerraClassicUSD price chart. Our digital asset exchange platform updates the USTC to USD price in real-time. You can also buy TerraClassicUSD instantly and securely through our crypto exchange platform, using traditional payment methods, like a debit or credit card, or funding your purchase with other cryptocurrencies you possess.
What is the Terra Classic Blockchain?
Terra Classic, the initial release of the Terra blockchain, was introduced in April 2019 by South Korea's Terraform Labs. Founded by Do Kwon and Daniel Shin, the company aimed to establish a global payment system using fiat currency-pegged stablecoins supported by a floating-rate cryptocurrency named Luna Classic (LUNC).
By utilizing smart contracts, the network generated and destroyed stablecoins like USTC, KRTC, EUTC, etc., based on fluctuations in supply and demand. Luna Classic (LUNC) served as collateral and a governance token, mitigating the stablecoins' price volatility. Additionally, Terra Classic facilitated decentralized applications (DApps) that utilized USTC tokens as a pricing benchmark or medium of exchange.
However, in May 2022, Terra Classic experienced a disastrous failure when USTC deviated from its peg to the US dollar and drastically decreased in value. This collapse occurred due to a significant sell-off of USTC caused by a market crash and liquidity crisis on major exchanges that supported the stablecoin. This sell-off triggered a negative cycle, compelling the protocol to mint trillions of LUNC tokens to repurchase USTC, resulting in hyperinflation and devaluation of LUNC.
This event drew comparisons to the DAO hack on Ethereum in 2017, which led to the creation of Ethereum Classic. In a similar vein, the Terra community decided to develop a new chain, called Terra (LUNA), with revised tokenomics and governance to prevent such catastrophes. The original Terra chain was rebranded as Terra Classic, and the native token LUNA was renamed as LUNA Classic (LUNC). The stablecoin UST on the new chain was also renamed as USTN.
What is the Luna Foundation Guard (LFG)?
The Luna Foundation Guard (LFG) is a non-profit organization, responsible for overseeing Terra, the entity that operates the LUNA and UST tokens. LFG gained attention for its significant Bitcoin purchases, which contributed to a record high for LUNA just before the UST depeg. Despite aiming to amass $10 billion worth of BTC, LFG had to sell its Bitcoin holdings to protect the UST peg. It remains uncertain if LFG will resume buying Bitcoin in the coming days.
Who Founded TerraUSD?
TerraUSD was founded by Do Kwon and Daniel Shin in April 2019. They established the Terra network (LUNA) and later launched TerraUSD on Bittrex Global in September 2020. TerraUSD has gained prominence in the stablecoin market, surpassing competitors like GUSD (Gemini) and PAX (Paxos). Terra, the blockchain supporting TerraUSD, was created by Terraform Labs, a subsidiary of Terra Alliance.
Do Kwon, the CEO of Terraform Labs, brings his expertise as a former software engineer at Microsoft and Apple, as well as his experience as the CEO of Anyfi, a decentralized wireless mesh network solutions startup. He has been recognized for his achievements as he features in Forbes' 30 Under 30 list of successful entrepreneurs.
Co-founder Daniel Shin is a talented economist and entrepreneur. Alongside Terra Alliance, he co-founded Fast Track Asia, a startup incubator, and successfully led TMON (Ticket Monster), a prominent e-commerce platform in South Korea.
How Did TerraClassicUSD (TerraUSD) Work in the Past?
TerraClassicUSD (Terra USD) used the LUNA token to back up its peg to the US dollar. It offered users low-volatile yields through the Anchor protocol, allowing them to earn up to 20% interest on their UST holdings as passive income. The TerraUSD stablecoin also provided interoperability, enabling users to exchange UST for TerraKRW, a stablecoin pegged to the Korean Won.
In the early days, TerraUSD experienced success and gained popularity as a stablecoin. However, on May 9, 2022, disaster struck as TerraClassicUSD depegged from the US dollar. The sudden depegging caused the USTs price to fall below $1, triggering panic among users and traders.
The depegging created a ripple effect, leading to a decline in the trading volume of the UST Token. People began exchanging their UST for other stablecoins on the Curve pool, causing sizable withdrawals from the Anchor protocol. This sudden surge in withdrawals eventually led to the collapse of TerraUSD's peg to the dollar.
Despite efforts to stabilize UST, such as minting more LUNA tokens, Terra was unable to reestablish the peg and regain public confidence. As a result, the price of UST plummeted and TerraClassicUSD's stability was shattered. The market witnessed a sharp decline as both LUNA and USTC prices dropped to nearly zero within a matter of days.
Live UST Price Today
On Changelly, you can access the current real time USTC price, along with other essentials related to the asset’s crypto market performance. This includes a 24 hour trading volume, recent price change, market capitalization (market cap is calculated by multiplying the asset's circulating supply with its current price), circulating supply, and total supply of TerraClassicUSD today. The price history of TerraUSD UST is also available on our chart, so you can use this data for your own TerraClassicUSD price prediction.
While TerraClassicUSD was once a prominent player in the stablecoin market, its decline serves as a cautionary tale about the potential risks and challenges faced by stablecoins in maintaining their peg to fiat currencies.
What Are The Best Exchanges For Buying And Selling UST?
For those interested in buying or selling UST, several reputable cryptocurrency exchanges offer this opportunity. People can easily buy, sell, and trade TerraClassicUSD against other altcoins, stablecoins, or fiat currencies through such platforms.
One such exchange is Changelly, a popular platform known for its user-friendly interface and competitive exchange rates. Changelly allows users to swap their cryptocurrencies for UST seamlessly, providing a convenient avenue for traders in search of liquidity.
What Are The Safest Crypto Wallets For Keeping UST?
When it comes to securing your UST holdings, hardware wallets provide an extra layer of protection against potential cyber threats. Two popular and trusted hardware wallets for storing UST are Ledger and Trezor.
Ledger wallets, such as the Ledger Nano S or Ledger Nano X, offer secure storage solutions for UST and other cryptocurrencies. With features like PIN code protection and secure chip technology, Ledger wallets prioritize the safety of your digital assets.
Similarly, Trezor wallets, including the Trezor Model T and Trezor One, provide users with a secure and user-friendly experience. These hardware wallets utilize advanced security measures, such as a strong authentication process and passphrase protection, to safeguard your UST holdings.
By utilizing hardware wallets like Ledger and Trezor, individuals can ensure the protection of their UST investments, giving them peace of mind in an increasingly digital world.
If you want to buy TerraclassicUSD or any other stablecoin, you should be aware of some potential risks associated with this activity:
Counterparty Risk. If the issuer or custodian of the stablecoin fails or faces financial difficulties, it may impact the stability and value of the coin.
Regulatory Risk. Stablecoins operate within a regulatory framework, and any changes in regulations could affect their value, liquidity, or even their existence.
Market Risk. Stablecoins are not immune to market volatility. Factors, such as supply and demand dynamics, market speculation, or sudden changes in investor sentiment, can impact their value.
Security Risks. Stablecoins rely on blockchain technology, which is susceptible to cyber attacks and hacking. Vulnerabilities in the underlying infrastructure may pose risks to stablecoin holders.
Limited Transparency. Some stablecoins may lack transparency regarding their reserves, audits, or collateral backing, making it challenging for investors to fully assess the stability and credibility of the coin.
Liquidity Risk. If a stablecoin lacks sufficient liquidity or trading volume, it may be difficult to convert it to other currencies or assets when desired.
Inflation Risk. While stablecoins aim to maintain a stable value, inflationary pressures or changes in economic conditions may erode the purchasing power of the stablecoin over time.
It's important to conduct thorough research and understand these risks before you buy crypto. The price of TerraClassicUSD can fluctuate rapidly because of the factors mentioned above. Digital assets must be traded with a full understanding of risks involved.
This text is for informational purposes only, and you must not regard it as investment advice or financial advice.
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