- Anchor’s total UST deposits dropped from $14 billion to a little over $11 billion.
- Terraform Labs is responsible for the whole Terra ecosystem’s operation and power.
The algorithmic stablecoin backed by the U.S. dollar, UST, will be supported by $1.5 billion in bitcoin and terraUSD from Luna Foundation Guard (LFG) following the recent deviance.
Recently, Polygon’s CISO Mudit Gupta came to Twitter to discuss a string of “fishy” UST-related occurrences that occurred one after the other. Terraform Labs first drained a Curve of $150 million in UST liquidity. Then, the Terra ecosystem’s stablecoins were dumped, and a sell-off was triggered exactly one minute after a freshly funded address bridged $84 million in UST to Ethereum. On the contrary, Gupta refused to engage in the blame game.
Gupta said:
“I’m not saying TFL depegged UST or nuked Luna. However, the timing of different things is sus.”
Do Kwon Comes to the Rescue
Terraform Labs is responsible for the whole Terra ecosystem’s operation and power. Its CEO, Do Kwon, jumped to its rescue and stated via a Twitter reply.
– We removed 150M UST from Curve to get ready to deploy into 4pool next week
— Do Kwon 🌕 (@stablekwon) May 8, 2022
– 84M dump not us – lmk if you find out who
– After the imbalances started to happen, we removed 100M UST to lessen the imbalance
Obv TFL has no incentive to depeg UST
He said Curve’s liquidity would be transferred to a different pool next week. Moreover, Kwon said that Terraform Labs had no motivation to depeg the stablecoin; they had eliminated 100 million UST to ‘reduce’ the imbalance. On Monday, the executive announced via Twitter that the LFG Council had recently resolved to invest $1.5 billion in cash to address ally market worries over UST.
UST de-pegging, as such, appears to have been sparked off by the sequence of huge withdrawals from Anchor. Depositing UST delivers high returns on the protocol’s part. Over the weekend, Anchor’s total UST deposits dropped from $14 billion to a little over $11 billion. UST began trading at a lower price than its stablecoin peers in the wake of this. There was clear deviance from the $1 mark on the pricing chart.
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