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LUNA Depreciates Below USD 0.05, and UST Continues to Fall Despite New Rescue Plans

Despite new rescue plans, LUNA falls below USD 0.05 and UST falls

Despite the team behind these projects declaring “three additional emergency operations” in an attempt to maintain the UST algorithmic stablecoin, the two most-discussed tokens this week – luna (LUNA) and terraUSD (UST) – continued to fall.

UST was trading at USD 0.42 at 10:06 UTC, down 30 percent in an hour and 12 percent in a day. LUNA, which was just a few days ago one of the top 10 cryptoassets, was trading at USD 0.047, down 52 percent in an hour and 99 percent in a day. By market capitalization, it is now placed 142nd (USD 282m).

The following “emergency actions” are suggested:

1. A proposal to burn the leftover UST in the neighborhood pool.
2. Terraform Labs (TFL), the company behind Terra, will use Ethereum to burn the remaining 371 million UST cross-chain tokens (ETH).
3. TFL just invested 240 million LUNA in order to guard against network governance threats.

According to the group, “Eliminating a large portion of the surplus UST supply all at once will relieve much of the UST peg pressure. In comparison to the sluggish burn rate and sort of downstream consequences that inflated on-chain swap spreads have on the Terra economy over time, this is positive.”
This idea, however, must still be approved by their community.

“Given the severity of the current Terra issues, this proposal will be initiated as an on-chain vote immediately,” they stated.

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