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TerraClassicUSD
In May 2022, as the community believed, a huge number of USTs were dumped on the exchange, which triggered a sudden drop in the value of USTs, leading to the depreciation of the stablecoin.
This provoked a lot of fuss among traders, who began to realize more UST and also mint more LUNA, which led to a sudden increase in the prescription of LUNA in the bazaar cycle.
This demise spring led to the failure of LUNA, and almost one hundred percent of the LUNA market price disappeared within a week. In order to protect the Terra ecosystem and also to renew the mutual trust of traders, after the public vote, the Terra group announced the strict forking of the Terra blockchain.
The project’s mission
Launched in 2019, the Terra venture is designed to stimulate the introduction of cryptocurrencies as well as form the best sphere for the purpose of dApp creators along with support for the scattered blockchain protocol along with unclosed initial code.
Its founders are Up to Kwon, former software engineer at Apple and also Microsoft, CEO of the startup Anyfi, and Daniel shin Covers, economist, co-founder of Fast Track Asia and also the electric commerce platform TMON.
Terra was designed as well as the main platform with the purpose of forming stable coins found to fiat money units as well as exploring dispersed add-ons. But in May 2022 the system suffered a failure, thus TerraUSD lost its peg to the dollar.
The exact circumstances of the crash remain unknown. Soon after this Up to Kwon categorically refused from public reports, leaving the presence of this dynamism on Twitter.
The co-founder of Terraform Labs said that no one in any way leaves the investigation and also agrees to assist.
At the time of writing the note Up to Kwon, that a certain period was on the run, was detained in Montenegro and is also waiting for a date in prison. At the same time, the judicial process of Midday Korea rejected the order to detain Daniel Shin.
Features of the Terra blockchain
Terra blockchain is specialized for the purpose of forming fiat stable coins due to the result of the seigniorageof ties. The mute uses the Delegated Proof-of-Stake (DPoS) consensus method.
The plan rapidly gained popularity in Asia, and then spread to European countries as well as the United States of America. Along with the TerraUSDsteiblcoin, found to the United States dollar (nowadays known as TerraClassicUSD), the platform also made a great offer of steiblcoins found to the currency, Tatar tugrik, South Korean won and other monetary units.
The system of pegging to fiat in Terra stood out from the pegging elements of other stable coins. In order to manage stable coins and also to strengthen their peg, the site uses methods, not real dollar reserves. Terra’s stable coins were directly combined with its blockchain cryptocurrency, named LUNA (nowadays popularly known as LUNA Classic or LUNC).
The creators positioned LUNA as a mechanism to protect stable coins from volatility. The concept used this cryptocurrency to set the price of stablecoins and also designated it as a counterparty for the purpose of users seeking to exchange stablecoins in LUNA and vice versa.
In order to strengthen the stability of TerraUSD direction, the platform uses 2 main methods:
When the demand for stablecoin increased, the rate of burning LUNA tokens and minting UST tokens increased.
With a decrease in demand for stablecoin, the burning of LUNA tokens slowed down, and the mining of UST tokens intensified.
The development of algorithmic stablecoins has made the system model more scalable and accessible compared to competing projects.
Key details about TerraClassicUSD (USTC)
TerraClassicUSD (USTC) is an algorithmic stablecoin that was launched by the unique Terra blockchain in 2020 under the name TerraUSD (UST). Equally as previously mentioned, this stablecoin was not backed by any real bucks. The price of TerraUSD (UST) was tested by methods that burned and also minted LUNA.
The platform made an excellent offer a number of methods to utilize the stablecoin:
- Acquisition of idle earnings. For the purpose of this in the blockchain Terra was launched accumulation act Anchor together with a fixed profitable rate. Users who blocked their own assets in the liquidity pool in a particular period, was given a guarantee of inactive profit in the amount of 20% of the initial funds.
- Mutual exchange in other stablecoins from within the concept along with the lowest commissions.
- Forex trading. Many cryptocurrency exchanges have offered trader vaping along with TerraUSD (UST).
- Online payments. Stablecoin could possibly be used as a payment resource to pay for products as well as services or to transfer money to cryptocurrency wallets of recipients in every point of society.
How TerraUSD (UST) became TerraClassicUSD (USTC)
In its own period, TerraUSD (UST) was one of the largest algorithmic stablecoins. But in May 2022, it suddenly lost its peg to the United States dollar.
On May 9, the direction of UST fell down to $0.68 in the absence of explanation of the factors and also the likely possibilities of the coin.
As a consequence of the fall in direction, users began to extract the highly liquid UST with Anchor Protocol, change and also cash out stablecoin.
Trying to balance the situation, the site activated LUNA mining. Unfortunately, the cryptocurrency got caught in a hyperinflationary spring and also lost more than 95% of its price.
Despite efforts to save TerraUSD (UST), such as the realization of which belong to the bitcoin debarked in the necessary amount of 1.5 billion dollars, as well as the burning of LUNA in order to reduce the size of the circulating prescription, the system resumed to suffer.
In an effort to restore the plan, the co-founders stimulated community action, which led to the founding of another blockchain called Terra Classic.
As a result, TerraUSD (UST) was renamed TerraClassicUSD (USTC) and LUNA was renamed LUNA Classic (LUNC).
The other Terra blockchain, also known as Terra 2.0, is aimed primarily at dApps and also refers to the society in the absence of the role of Daniel Cover and Up to Kwon.
Algorithmic stable coins were taken out of the texture of Terra 2.0, as well as the single cryptocurrency of the Terra start plan (LUNA).
Where Can You Buy TerraUSD (UST)?
In order to purchase TerraUSD (UST), you should possess bitcoin or a medium in order to exchange it into UST in exchanges where the token is quoted.
Such exchanges include KuCoin, Uniswap (V2), Bittrex, Bitfinex, Gate.io, PancakeSwap (V2), Sushiswap, Terraswap, 1inch Exchange, MEXC, OpenOcean, DODO BSC.
Learn more about this as well as how to buy bitcoin and other cryptocurrencies in our educational debarked – CoinMarketCap Alexandria.
What is the Luna Foundation Guard (LFG)?
Luna Foundation Guard (LFG) is the company that manages the Terra company, which is fond of issuing LUNA tokens as well as UST.
The LFG company got into the names of novelties, if it repeatedly swept bitcoin, which led to the achievement of an unprecedented degree of LUNA in general because of months up to the depeg of UST.
Despite the fact that the announced target of Luna Foundation Guard was to accumulate BTC in the necessary amount of Ten billion. $, it needed to eliminate its own Bitcoin stockpile in an effort to preserve the UST peg. At the time of writing, it is unclear whether LFG will continue to acquire bitcoins in the future.
