Was Terra’s UST cataclysm the canary in the algorithmic stablecoin coal mine?

2022.05.19 00:46

Was Terra’s UST cataclysm the canary in the algorithmic stablecoin coal mine?

The past week has not been an easy one. After the collapse of the third-largest stablecoin (UST) and what used to be the second-largest blockchain after Ethereum (Terra), the depeg contagion seems to be spreading wider.

While UST has completely depegged from the U.S. dollar, trading at sub $0.1 at the time of writing, other stablecoins also experienced a short period where they also lost their dollar peg due to the market-wide panic.

Asset-backed stablecoins were in favor during downturn, except for USDT

@elenahoo @elenahoo

Are algorithmic stablecoins finished?

@elenahoo @elenahoo

Source