Double bubble? Terra's defunct 'unstablecoin' suddenly climbs 800% in one week

2 years ago

The USTC price rally does not mean it would reclaim its lost U.S. dollar peg in the future.

Terra's $40-billion experiment to create a functional "algorithmic stablecoin" project has failed drastically following its collapse in May.

Nonetheless, its native stablecoin TerraClassicUSD (USTC), earlier called TerraUSD (UST), has been thriving in the past week.

Dead stablecoin walking

To recap, UST lost its U.S. dollar peg in May following mass withdrawals from Anchor Protocol, a lending and borrowing platform offering up to 20% yield to clients on their UST deposits. As of June 15, the token was almost worthless, trading at $0.005 at the Kraken crypto exchange.

But USTC started recovering afterward, insomuch that its value per token almost reached $0.10 on June 29. Simultaneously, its capitalization surged from $65 million to $767 million in the same period, according to data from CoinMarketCap.

That is despite USTC operating as an abandoned token after Terra launched a new blockchain with a new native asset LUNA 2.0, following a "hard fork" in May.

Interestingly, LUNA 2.0's older version, called LUNA, which now operates under the name "Terra Classic (LUNC), has also witnessed a spike in its market valuation like USTC, surging from around $160 million to $767 million in June.

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