Terra’s LUNA tokens tanked to about $4.51 at 3.40 am ET on Wednesday, an 85% plunge in the last 24 hours, partly due to the instability of TerraUSD.
UST has lost its peg to the USD going as low as $0.27, with the holders of the stablecoin losing more than 60% of the value of their holdings.
TerraUSD has failed to maintain its peg to the value of the USD despite Luna Foundation Guard deploying $1.5 billion in assets recently. The foundation is reportedly looking to raise over $1 billion to salvage the situation.
DeFi platform offering yields on UST deposits, Anchor, has recorded $11 billion losses in the past two days, with the fall coming after the TVL peaked at $17 billion a week ago.
UST is an algorithmic stablecoin that is pegged to the USD value at a 1:1 ratio. The platform uses a burn mechanism to maintain the peg.
Source: THE BLOCK