After Investing All Of Her Life Savings On UST, An Argentinian Woman Loses Everything.

According to an article published by tech news outlet “Rest of the World,” people in Argentina, Venezuela, and Nigeria found the “apparent security of stablecoins” such as UST to be particularly appealing when determining what to do with their meager funds.

According to the report, the $LUNA and $UST crashes “shattered that illusion.” One of the numerous people questioned by the report’s authors was Valeria, a 47-year-old Agrentinian woman who “makes around $300 a month selling prepared food from her home in Buenos Aires.”

Because of the country’s annualized 50% inflation rate, the 47-year-old was concerned about maintaining the money stored in Argentine pesos. So she invested more than $1,000 — all of her money plus $500 borrowed from a friend to buy a new refrigerator — in TerraUSD (UST), a digital stablecoin that claimed to be pegged one-to-one with the US dollar.

While cryptocurrencies like bitcoin are known for their volatility, stablecoins guarantee security. Their prices are typically linked to a hard currency, such as the US dollar, or a commodity, such as oil or precious metals. Some, like as UST, can also be used to produce yields through protocols such as Mars and Anchor, which provide users with a variable or set interest rate when they deposit their stablecoins.

Valeria had spent months researching UST before investing in numerous regimens four months ago. The stablecoin lost its peg in mid-May, causing its value to deviate from that of the dollar and its price to plummet to mere cents. Valeria watched her funds shrink to zero since she couldn’t get the money out of the protocols that had banned withdrawals.

“I invested in a stablecoin that today is worth $0.08. I feel sickened and helpless.”

Stablecoins’ seeming security has made them appealing to citizens in nations with high inflation or currency depreciation, such as Argentina, Iran, and Nigeria.

Mudasir, a UST holder from Pakistan, said:

“They scammed [me]. I have nothing left, not even a penny.”

Unlike other stablecoin providers that claim to retain reserves related to the underlying asset they monitor, such as Tether, UST was backed by a complex algorithmic mechanism that maintained the peg via a network of traders in the underlying cryptocurrency Luna.

According to one Argentine, they invested in UST due to the country’s inflation and peso depreciation. They suffered a $17,000 loss.

“I felt betrayed by [crypto exchange] Binance for promoting this as safe and stable,”

Another investor in Terra-based protocols stated that UST was popular in Argentina due to “the people’s need to access a safe and stable currency.” He lost 90% of his holdings and called UST a “scam.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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