UST is an algorithmic stablecoin a.k.a. backed by the LUNA token. Hence it's pretty much almost backed by thin air; hence why Luna Foundation Guard had to purchase a good amount of bitcoin to protect the peg if it's the case that there's a bank run.
And yea, it happened:
Peg broke due to UST having a huge bank run, with people selling the UST for other stablecoins (hence pushing down the price of UST). Now for the peg to be restored to $1, Luna Foundation Guard had to liquidate a crap ton of bitcoin on their reserves just to push UST back to $1, further pushing down the downward pressure on BTC.
Topic: ELI5: What happened to UST and why it happened? - page 2. (Read 216 times)
I guess many of you heard the news about UST going down all the way to ~ 0.60 and even Janet Yellen commented on it. So, can someone please explain it why it happened to UST? What is wrong (?) with it?
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