TEMPO.CO, Jakarta – Terraform Labs CEO Do Kwon announces plans to rescue or stabilize the price of the algorithmic stablecoins TerraUSD and Luna (Earth Moon) which plunges free and rages on the crypto market.
Collect CointelegraphWednesday 11 May 2022, coins Luna has fallen 90 percent from its all-time high, while stablecoin TerraUSD has weakened 75 percent below US dollar parity.
Kwon has planned several remedial actions, to save the scorched billions of US dollars from Terraform Labs’ total market cap.
Decentralized stablecoin protocols such as TerraUSD or UST are designed to provide early solutions for disastrous situations, when TerraUSD has shifted away from its dollar peg of 50 cents, which normally costs $1.
The rescue process should use the UST ‘burning’ method.
According to Kwon, the price stabilization mechanism is carried out by absorbing UST as much as 10 percent more than the total supply of assets crypto- the. But there are consequences that must be paid.
“The cost of absorbing so many stablecoins at the same time has expanded spread swap on-chain up to 40 percent, and the price of LUNA has been reduced dramatically by absorbing arbs,” Kwon said in a tweet.
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