Cryptocurrency Terra (LUNA) lost more than 97% on Wednesday due to the drawdown of the stablecoin UST. The former stablecoin itself, which cost $1 at the beginning of the week, fell to $0.30. Terra (LUNA) crashed below $1 on Wednesday, although it started the day above $23 and the week above $66. Last week, the price of the altcoin Terra exceeded $80, and it was among the top ten largest cryptocurrencies by capitalization. The asset currently ranks 35th in the CoinGecko ranking. On Wednesday, May 11, the algorithmic stablecoin of the Terra ecosystem – TerraUSD (UST) – again lost its peg to the US dollar. The LUNA cryptocurrency used for its release has lost more than 97% over the past 24 hours. On May 8, UST briefly lost its peg to the US dollar amid an outflow of assets from the Anchor protocol due to a decrease in the rate of return on deposits to 17.87%, writes forklog. To protect the “stability of UST and the Terra ecosystem as a whole,” the Luna Foundation Guard (LFG) provided loans to OTC firms in the amount of $1.5 billion. On May 10, UST again lost its peg to the dollar – quotes fell below $0.62. On the same day, the media reported on LFG’s plans to raise $1 billion to stabilize the stablecoin rate. Rumors about an additional issue of LUNA in the amount of 80 million coins did not help stabilize the UST rate. According to The Block, LFG’s attempts to raise funds have failed. Terra has been one of the most promising projects until recently: its stablecoin ranked third in terms of capitalization with $18 billion in the stablecoin rating, in the DeFi sector it was second only to Ethereum, and the LUNA balance coin was the only one of the TOP 10 that updated its historical maximum in 2022, writes investing. The fall was so loud that it caught the attention of US Treasury Secretary Janet Yellen. At the moment, it is not known for certain whether Terra lost all its reserves in an attempt to maintain the UST rate, or whether it decided to stop stabilizing it at the expense of the reserve. Source: FXPro

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