It has been a couple of rough weeks in crypto, with the largest algorithmic stablecoin, Terra USD (UST) falling apart and plummeting from a ~ $18 billion marketcap to a measly $1.2 billion within a week. With huge withdrawals from Anchor, and subsequent swaps to other stablecoins, the large sell pressure drove down the price of UST, while causing LUNA to fall into a death spiral as people redeemed their UST.
Many investors had already moved their portfolios into stablecoins before this occurred, due to uncertain macro conditions. While UST was believed to be a stablecoin, this turned out to be far from the truth as events from last week clearly demonstrated. With many spooked by UST’s steep decline, faith in other stablecoins (centralized or not) were also shaken. In this edition, we take a look at how other stablecoins reacted to the Terra / UST collapse. And if you missed everything that went down with Luna / UST last week, head over here to catch up!