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The Ghost of Terra: USTC’s Struggle to Regain $1 Peg

CoineditionCoinedition2024/07/15 12:13
By:Anisha Pandey
  • TerraUSD (UST) crashed in 2022 and was rebranded to TerraUSDClassic (USTC).
  • The stablecoin is currently trading 99% below its expected price of $1.
  • Terraform Labs ended operations, passing the chain’s ownership to the community.

Three years after the implosion of the Terra ecosystem, the algorithmic stablecoin TerraUSDClassic (USTC) remains far from its intended $1 peg, raising questions about the viability of algorithmic stablecoins and the future of the beleaguered project.

The project secured funding from prominent crypto exchanges like Binance and Coinbase. However, in May 2022, UST lost its peg, triggering a catastrophic crash that wiped out $45 billion from the crypto market in a single week.

The TerraUSD stablecoin was subsequently rebranded as TerraUSDClassic (USTC), and Terra (LUNA) was renamed Terra Classic (LUNC). Do Kwon, the founder of Terraform Labs, announced a new Terra (LUNA) token to compensate users affected by the crash.

Three years later, USTC has yet to reclaim its $1 peg. According to CoinMarketCap data , the stablecoin is currently priced at $0.01681, up almost 1.5% in the past 24 hours. It holds a market cap of $93 million, a stark contrast to its peak valuation of $18.77 billion.

Down almost 99% from its intended $1 price, USTC appears to have been abandoned , with little chance of recovery. In June, Terra CEO Chris Amani stated that the community would need to take ownership of the chain, suggesting that the project’s future lies in the hands of its users.

I believe there are a couple teams and devs who want to do this and you should be seeing information in the forums soon.”

Furthermore, the TradingView chart indicates a relative strength index (RSI) below 50, signaling bearish control over USTC’s price action. However, the gradient of the line suggests a potential for higher prices in the near future, should bullish investors capitalize on the discounted prices.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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