Business Maverick: Cost of Failed Terra Stablecoin Rescue Reaches $2.9 Billion

  • 📰 dailymaverick
  • ⏱ Reading Time:
  • 60 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 27%
  • Publisher: 84%

South Africa News News

South Africa South Africa Latest News,South Africa South Africa Headlines

A backer of the collapsed TerraUSD stablecoin has burned through almost all of its more than $3 billion in cryptocurrency reserves in a failed effort to restore its peg to the dollar.

The Luna Foundation Guard, the entity set up by Terraform Labs to maintain TerraUSD’s peg to the dollar, used up roughly $2.9 billion in crypto reserves since May 7 trying to stabilize the token, data compiled by Bloomberg based onMonday on LFG’s unverified Twitter account show. The reserves stood at almost $3.2 billion before, according to the data.

Unlike collateralized stablecoins such as Tether, UST primarily used algorithms and trader incentives involving its sister coin Luna to maintain a 1-to-1 peg with the dollar. As the token grew in prominence, its backers started to build a massive war chest of Bitcoin and other cryptocurrencies as an additional backstop to UST.in its tweet. Based on the closing price that day, the Bitcoin hoard was then worth $2.88 billion. LFG said it now holds 313 Bitcoin, worth about $9.

The remaining reserves will be used to compensate UST holders, with the smallest ones first in line, LFG tweeted. That’s a tiny fraction of the more than $16 billion in market value UST has lost since it crumbled from its dollar peg. LFG didn’t immediately reply to an email seeking comment.In total, investors may have lost as much as $42 billion in total in the crash of UST and Luna, according to David Carlisle, vice president of policy and regulatory issues at crypto researcher Elliptic.

“The Terra case will light a major fire under an already intensive regulatory debate about the consumer protection, market conduct, and financial stability risks of crypto,” Carlisle said in an email.

We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 3. in ZA
 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.

South Africa South Africa Latest News, South Africa South Africa Headlines

Similar News:You can also read news stories similar to this one that we have collected from other news sources.

Business Maverick: New Zealand records its weakest population growth in 30 yearsThe population advanced by just 19,200, or 0.4%, to 5,127,000 at March 31, Statistics New Zealand said on Monday in Wellington. That’s less than the 25,100 gain in the year through March 2021 and is the lowest since the government agency began providing estimates in 1992. I am super excited right now, I can now pay my bills and take good care of my family.. Thank you for bringing happiness to my home with just $5000 i got $50,000 in 7days Williamchurch07 I wish everyone can be like you, Helen, I haven't lost since you have been managing my trading account, I love you so much JonathanHele
Source: dailymaverick - 🏆 3. / 84 Read more »

Business Maverick: London property exodus is in reverse as tenants returnTenants flocking to London are driving up rents in the capital, reversing the pandemic “race for space” and adding to the UK’s cost-of-living crisis. I am super excited right now, I can now pay my bills and take good care of my family.. Thank you for bringing happiness to my home with just $5000 i got $50,000 in 7days Williamchurch07
Source: dailymaverick - 🏆 3. / 84 Read more »

Business Maverick: Wheat soars in risk to food inflation as India restricts exportsWheat jumped by the exchange limit after India’s move to restrict exports, exposing just how tight global supplies are after the war in Ukraine and threatening to drive up food prices even more. Now, India has announced it will suspend overseas sales to manage its food security. There is a crisis at Motheo TVET in Bloemfontein, why are you not covering that? I am super excited right now, I can now pay my bills and take good care of my family.. Thank you for bringing happiness to my home with just $5000 i got $50,000 in 7days Williamchurch07
Source: dailymaverick - 🏆 3. / 84 Read more »