Stock Infographics

The unpeg of 3rd largest stable coin, UST

DonkeyStock
Publish date: Tue, 10 May 2022, 04:16 PM
Visual content on financial market and investment trends

Algorithmic stable coins use market incentives, controlled by the algorithms that give the cryptocurrency its name, to maintain a stable price against a currency such as a dollar, rather than backing the price with assets like cash or Treasury securities, as other stable coins do.

An algorithmic stable coin called TerraUSD is now the third-largest stable coin by market value. This stable coin has unpegged from the Dollars just a few hours ago. You could use 60 cents to acquire a dollar of this stable coin. It could be an opportunity for arbitrage or the value of UST could go lower as confidence fades.

The idea behind an algorithmic stable coin is that you create an economic incentive with another token in order to maintain its stability. The confidence of the stable coin comes from another token. Unlike the US Dollar, the confidence is backed by the productivity of the nation, the tax income of the citizens, the military power and its technological marvels, etc.

I don’t know where that confidence comes from for Luna and UST.

 

Source: iSquare

More articles on Stock Infographics
Views on Wheat Prices

Created by DonkeyStock | Jun 14, 2022

The prices of food are not going down anytime soon.

Another depeg in the crypto industry

Created by DonkeyStock | Jun 13, 2022

Something bigger than Luna and has a larger implication for the Defi market is starting to face a collapse in confidence

Some views on BNPL industry

Created by DonkeyStock | Jun 10, 2022

BNPL, an industry Apple just ventured into

Demand for Mortgage at an all-time high

Created by DonkeyStock | Jun 09, 2022

The demand for a loan to purchase residential properties is at an all-time high.

Inflation = Money Supply > Goods & Service produced

Created by DonkeyStock | Jun 07, 2022

A closer look at Malaysia's money supply and GDP

Discussions
Be the first to like this. Showing 0 of 0 comments

Post a Comment