LUNA Price Fell Nearly 50% From Its ATH As UST Stablecoin Reduced Its Peg
LUNA prices fell over the weekend as UST reduced its peg
Terraform Labs has been withdrawing liquidity from the world’s third-largest stablecoin ecosystem, according to transaction data. Large quantities of UST were withdrawn from the Curve Finance DeFi protocol. As a result, the UST stablecoin’s peg fell.
Mudit Gupta, an analyst, tweeted the token movements on May 8, alleging that the “UST fiasco is very fishy.”
Gupta did not accuse Terraform Labs of de-pegging the stablecoin, but he did raise concerns about the timing: “Today’s events seem like a coordinated attack that could have been organized using insider information that got leaked.”
On Sunday, UST had plummeted from its peg to a low of $0.990, but LUNA had lost far worse. At the time of writing, the stablecoin was still trading just below a dollar, at $0.9952.
Following that, Terraform Labs CEO Do Kwon revealed that 150 million UST had been taken from Curve in preparation for rollout to the DeFi protocol’s 4pool liquidity pool. He added, “after the imbalances started to happen, we removed 100M UST to lessen the imbalance,” before saying that the company had no reason to depeg the stablecoin.
The Luna Foundation Guard stated on May 9 that it was preparing a $750 million Bitcoin loan to over-the-counter (OTC) trading firms to help protect the UST peg.
Many people commented that the Terra ecosystem is not as decentralized as it claims to be. According to CoinCu, LUNA has dropped 4.44% in the last 24 hours to $62.29. Furthermore, the LUNA token has dropped nearly 50% from its all-time high of $119 on April 5.
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