Terra’s UST stablecoin fell way off its peg, causing a 60% drop in LUNA.
Terra’s price has dropped 43.6 % in the last 24 hours. This comes as TerraUSD (CRYPTO: UST), Terra’s stablecoin, has dropped to $0.93, a 7 % drop from its peg in the last 24 hours.
At the time of writing, Terra has plummeted below $14 for the first time in six months, causing one of the most significant sell-offs among large-cap coins we’ve witnessed this year LUNA has fallen out of the top ten list of tokens by market capitalization, with a market cap of less than $12.5 billion.
What Is Luna Foundation Plan To Shore Up UST Stablecoin?
According to three sources knowledgeable with the matter, the Luna Foundation Guard (LFG), a Singapore-based non-profit that promotes the Terra blockchain ecosystem, is aiming to fund more than $1 billion to shore up the UST algorithmic stablecoin after it lost parity with the US dollar.
According to the individuals, the group is now seeking new funding from some of the industry’s major investment firms and market makers. The transaction, which is still being discussed, allows investors to buy LUNA tokens at a 50% discount, with a two-year vesting timeline.
The fundraising effort, which could help the project maintain its dollar peg in the future, is LFG’s latest attempt to restore market trust. LFG said on Monday that it has lent $1.5 billion in bitcoin and UST to third-party trading businesses. LFG had hoped to buy as much as $10 billion in bitcoin to help support the stablecoin’s peg.