Do Kwon, co-founder and chief executive officer of Terraform Labs, poses in the company’s office in Seoul, South Korea, on Thursday, April 14, 2022. Photographer: Woohae Cho/Bloomberg
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Following a day in which teetering stablecoin TerraUST (UST) bounced around $.90, it resumed its free-fall overnight to approach $0.30 before recovering partly to $.43 this morning.
UST fell again overnight
However, this performance could be considered downright bullish when compared to LUNA, the token designed to maintain its $1 peg, which has now fallen below $2. LUNA is done a staggering 98% in the past five days, which has seen its market capitalization lost $25 billion this week.
Luna has lost 98% of its value this week
Today attention will focus on whether the Luna Foundation Guard, led by founder Do Kwon, will be about to recover from this downward spiral. The Block reported yesterday that the team was in talks to obtain $1 billion in additional collateral from unnamed hedge funds and market makers. However, that has not come to fruition.
This morning, Kwon expressed support for a new community-driven plan that will mint additional LUNA in an effort to absorb the excessive UST sell-pressure. However, even if this succeeds, it will likely require LUNA’s biggest backers, which include prominent crypto shops such as Pantera, BlockTower, and Galaxy to endure additional haircuts.
“Naturally, this is at a high cost to UST and LUNA holders, but we will continue to explore various options to bring in more exogenous capital to the ecosystem & reduce supply overhang on UST,” said Kwon.
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