Скачать или смотреть Unstable Stablecoin How Crypto’s Crash Broke The Buck For TerraUSD

Crypto critics who believe that the industry is nothing more than a series of intricate ponzi schemes are puffing their chests today. TerraUSD (UST), a digital token with a $16 billion market capitalization that is designed to maintain a 1:1 peg with the dollar, known as a stablecoin, nosedived over the past 24 hours. Its price fell below $.65, before somewhat recovering to $0.93 as of this writing. In other words, UST failed spectacularly at the one thing that it was supposed to do - maintain parity with the dollar. The episode is reminiscent of when the Reserve Primary Fund, a money market mutual fund with $68 billion in assets fell from $1 per share net asset value to $0.97 during the financial crisis after Lehman Brothers filed for bankruptcy in 2008. It owned Lehman commercial paper and the investment bank’s collapse caused a panic among money market fund holders who rushed to redeem shares. Money market funds were thought to be as safe as FDIC-insured savings accounts. In terms of TerraUSD, the drop happened to fall on the same day that the Federal Reserve issued its biannual Financial Stability Report, in which stablecoins featured prominently. The report noted how stablecoins can be subject to runs on money market funds, especially during times of stress when the assets backing these tokens can become illiquid. So what exactly happened with UST? To begin, it is important to note what makes the asset unique, or dangerous, within the world of stablecoins. UST is an algorithmic stablecoin, which means that it operates in a different way than most similar assets. More popular stablecoins, such as tether (USDT - $82 billion market cap) and USD Coin (USDC - $50 billion market cap), are backed by assets such as fiat dollars in a bank account, treasuries, or short-term commercial debt. This approach is also dangerous since issuers have at times been opaque about the exact breakdown of their reserves, USDT has been especially controversial, and watchers are concerned that these assets may not have enough liquid collateral to redeem the $100+ billion in assets that they support. That said, those appear to be a paragon of stability when compared to UST. Instead of being backed 1:1 by tangible assets at a bank or custodian, UST uses a complicated setup with another token, LUNA, to try and maintain its peg. LUNA is a native token of the Luna blockchain, a decentralized platform like Ethereum that can run various types of applications like decentralized finance programs (trading and lending) and support non-fungible tokens (NFTs). Every UST is supposed to be redeemable for $1 worth of LUNA, currently priced at $30.00Of course prices fluctuate just like in the fiat world. The exchange rate for a dollar against other currencies adjusts on a daily basis. In UST’s world, LUNA is supposed to be a stabilizing mechanism to help return the price of UST back to $1 when it deviates.


All data is taken from the source: http://forbes.com
Article Link: https://www.forbes.com/sites/steveneh...


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