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An $18 billion stablecoin is losing its dollar peg with all the magical chaos of algorithmic stables, with a dash of Bitcoin systemic risk drama.
Here's everything you need to know.
The $UST Depeg Thread:
👇
$UST is a dollar-pegged stablecoin that has depegged twice in the last few days, now hovering around $0.90 to the dollar.
Just a reminder on how $UST works:
You can always redeem $LUNA for $UST dollar-for-dollar, and vice versa.
If $LUNA is at $50, you can redeem it for 50 $UST.
Similarly you can redeem 50 $UST for 1
It's worth noting you can always redeem 1 $UST for $1 worth of $LUNA, even if $UST is worth <$1.
It's meant to be a stabilizing mechanism:
If $UST is trading at $0.99, arbitrageurs can buy it and redeem it for $1 of $LUNA.
We all know Stablecoins Require Utilityâ„¢ to maintain demand and defend their peg.
So where does $UST get utility?
Simple, Anchor Protocol.
Anchor Protocol is (nominally) a money market, but the important tl;dr is it pays you 19.5% to stake $UST.
Here's everything you need to know.
The $UST Depeg Thread:
👇
$UST is a dollar-pegged stablecoin that has depegged twice in the last few days, now hovering around $0.90 to the dollar.
Just a reminder on how $UST works:
You can always redeem $LUNA for $UST dollar-for-dollar, and vice versa.
If $LUNA is at $50, you can redeem it for 50 $UST.
Similarly you can redeem 50 $UST for 1
A thread about all the opportunities in the Terra $LUNA ecosystem:
— Route 2 FI (@Route2FI) January 7, 2022
In this thread, I'll focus on the nr. 2 biggest ecosystem in terms of TVL in DeFi ($16.8b).
There are plenty of opportunities in crypto to earn yield.
Let's look at how you can make it with Terra $LUNA
/THREAD pic.twitter.com/SKmEY3cBOT
It's worth noting you can always redeem 1 $UST for $1 worth of $LUNA, even if $UST is worth <$1.
It's meant to be a stabilizing mechanism:
If $UST is trading at $0.99, arbitrageurs can buy it and redeem it for $1 of $LUNA.
We all know Stablecoins Require Utilityâ„¢ to maintain demand and defend their peg.
So where does $UST get utility?
Simple, Anchor Protocol.
Anchor Protocol is (nominally) a money market, but the important tl;dr is it pays you 19.5% to stake $UST.