The recent drop in UST prices is leading to a significant drop in related cryptocurrencies. Crypto hedge funds are now rethinking their strategy and some have already decided to close for good.
The “terra ust strike” is a problem that has been around for a while. Terra has resulted in an 80%+ decrease in DeFi protocols associated with UST.
The fallout from the collapse of Terra (LUNA) and its stablecoin TerraUSD (UST) reverberated widely in the cryptocurrency market on May 11, with projects with some connection to the DeFi ecosystem seeing their values plummet.
The forced sale of Bitcoin (BTC) assets that support some of UST has also led to BTC’s recent collapse to $29,000, and experts worry that DeFi platforms with UST and LUNA liquidity pools may fail.
USDT links from LUNA, ANC, ASTRO and MARS. 4-hour chart TradingView (source)
Terrain-based procedures are harmed.
Projects hosted on the Terra protocol, such as Anchor Protocol (ANC), Astroport (ASTRO), and Mars Protocol, have the worst prospects (MARS).
Anchor Protocol (ANC), Astroport (ASTRO) and Mars Protocol (MARS) have all dropped their token values by more than 80% since May 4, when the LUNA price began to correct.
The protocols in question are all DeFi-focused, meaning they have a lot of integration with UST as their primary stablecoin and LUNA as a major source of value locked into their smart contracts.
It seems unlikely that these proceedings will be able to reverse and recover from today’s impact as long as UST continues its $1 peg and LUNA falls 98 percent from where it was just 7 days ago.
The Interblockchain Communication Protocol (IBCP) was also affected.
The fall of UST had a significant impact on assets in the Cosmos ecosystem. By integrating with Terra, ATOM and other tokens that use the Interblockchain Communication Protocol (IBC), such as Mirror Protocol (MIR), Osmosis (OSMO) and Kava, they have been drastically corrected.
4-hour chart of ATOM/USDT vs. KAVA/USDT vs. MIR/USDT vs. OSMO/USDT. TradingView (source)
The price drops of these assets were less severe than those of the Terra protocol, but their Terra proxy failed to prevent infection.
The LUNA crisis has spawned hypotheses and “I told you so” statements from the crypto world.
The volatility benefits Maker.
Maker (MKR) is the only bright light in trading on May 11, with crypto traders now adopting Dai (DAI) as the “best” decentralized stablecoin choice available.
On May 11, MKR price rose 124 percent from a low of $1,025 to an intraday high of $2,299, before returning to $1,278.
4 hour chart of MKR/USDT. TradingView (source)
As the market processes the recent correction and news of fund and protocol errors emerges, it will be fascinating to see how other stablecoin protocols such as Frax Share (FXS), USDD and mStable (MTA) fare and whether crypto traders become more centralized. would choose alternatives.
The thoughts and opinions of the author are entirely his or her own and do not necessarily reflect those of Cointelegraph.com. Every investment and trading choice has risks, so do your homework before making a decision.
The “terra blockchain” is a project that aims to disrupt the current state of finances. This project has resulted in an 80%+ decrease in DeFi protocols associated with UST.
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