TerraClassicUSD

TerraUSD (UST) is a decentralized, algorithmic stablecoin operating on the Terra blockchain. Designed for scalability, this yield-generating coin is pegged to the US Dollar. TerraUSD was introduced to provide significant value to the Terra community and to offer a scalable solution for DeFi, addressing the pressing scalability issues encountered by other stablecoin frontrunners like Dai. As a result, TerraUSD ensures that users benefit from enhanced scalability, precise interest rates, and cross-chain utility.

TerraUSD offers numerous advantages that distinguish it as a leading stablecoin. Its innovative minting process ensures UST meets DeFi protocol demands while retaining scalability. Adding UST to crypto wallets is straightforward, with simple integration as a payment method. TerraUSD also excels in DApps, such as platforms that mint synthetic assets and monitor real-world prices, using UST as a pricing standard.

Introduced in September 2020, in partnership with Bittrex Global, TerraUSD has quickly earned a reputation as the most scalable stablecoin available. UST can operate alongside Terra's non-stablecoin crypto, LUNA, or function independently as a unique token.

Terra (LUNA) was founded by Do Kwon and Daniel Shin in April 2019. By September 2020, they had launched TerraUSD on Bittrex Global. Since then, TerraUSD has surpassed many rival stablecoins in the industry, such as GUSD (Gemini) and PAX (Paxos). Terra itself is TerraUSD's native blockchain, developed by Terraform Labs, a division of Terra Alliance.

Do Kwon serves as the CEO of Terraform Labs. Before this role, he worked as a software engineer at Microsoft and Apple and was the CEO of Anyfi, a startup focused on decentralized solutions for wireless mesh networks. Kwon has been recognized in the Forbes 30 Under 30 list of influential entrepreneurs globally.

Co-founder Daniel Shin is both an accomplished economist and entrepreneur. Prior to Terra Alliance, he co-founded Fast Track Asia, a startup incubator, and also co-founded and led TMON (Ticket Monster), a prominent South Korean e-commerce platform.

* Superior Scalability - As an algorithmic stablecoin, TerraUSD is pegged to the face value of minted stablecoins. To mint 1 TerraUSD, 1 LUNA reserve asset must be burned. This mechanism enables TerraUSD's monetary policy to scale efficiently, empowering DeFi projects to achieve maximum growth.
* Seamless Exchange - The Terra ecosystem's stablecoins enjoy shared liquidity, allowing TerraUSD to be swapped for TerraKRW (pegged to the Korean Won) with minimal fees.
* Potential for Passive Income - Users can earn passive income with TerraUSD through the Anchor protocol's stable interest rates, promising a 20% return on UST savings. Stable income stems from rewards on PoS chains, which are maintained by fees and inflation. This feature helps form a secure interest rate.
* Interoperability - The Dropship bridge protocol connects blockchain ecosystems, integrating TerraUSD into various DeFi and DEX platforms and facilitating asset transfers across chains. The value of TerraUSD is influenced by LUNA supply and demand, with the Dropship protocol ensuring stable scalability and maintaining UST's value.

In summary, TerraUSD (UST) is the pioneering decentralized stablecoin offering interest generation, remarkable scalability, and easy interchain transactions.

On May 9, 2022, UST lost its peg, dropping from $1 to as low as $0.68. As of now, it's uncertain if UST will regain its peg.

When UST began trading slightly under its dollar peg, the Curve pool holding UST was drained as investors exchanged their UST for other stablecoins. Concurrently, LUNA experienced short-selling, decreasing its price and, consequently, affecting UST, its collateral. Terra responded by minting additional LUNA to counteract UST's downward spiral. This action diluted LUNA's price but failed to restore UST's peg. Even a $1.5 billion BTC sale from Terra's treasury couldn't restore confidence in UST. Much like a bank run, UST holders preferred minimal returns over redeeming for LUNA.

You can delve into the complete analysis of the UST depeg here.

The Luna Foundation Guard (LFG) is the managing entity of Terra, responsible for the LUNA and UST tokens. LFG made news headlines by acquiring Bitcoin, driving LUNA to an all-time high shortly before the UST depeg incident. Although LFG aimed to amass $10 billion in BTC, it had to liquidate its holdings to attempt a UST peg recovery. It remains uncertain whether LFG will resume Bitcoin purchases in the future.

TerraUSD (UST) operates on the Terra blockchain without technical backing, relying on the burning of LUNA tokens for its creation.

UST's value fluctuates based on supply and demand dynamics and its relation to the US Dollar. If UST's value surpasses a dollar, LUNA holders can exchange tokens for UST. This increase in supply also boosts LUNA prices. When supplies are limited for profit, UST can be sold for Terra (LUNA), returning its price to the intended level. This process leads to the burning of some LUNA, creating scarcity and increasing its value.

By June 2021, the maximum supply was around 1.93 billion UST, with its scalability and functionality making TerraUSD (UST) a prominent stablecoin in the cryptocurrency realm.

TerraUSD (UST) maintains its peg to the dollar through Terra (LUNA), an asset reserve ensuring UST's stability via seigniorage (profit from money issuance).

Miners are crucial to Terra's security, participating in a proof-of-stake (PoS) consensus that stabilizes the network by absorbing short-term demand fluctuations. Stable mining demand is vital for security and reliability, so the TerraUSD protocol aims for consistent rewards across all economic scenarios. This approach compensates those who secure and develop the network.

To purchase TerraUSD (UST), you need Bitcoin or Ether to trade for UST on supported exchanges. These platforms include KuCoin, Uniswap (V2), Bittrex, Bitfinex, Gate.io, PancakeSwap (V2), Sushiswap, Terraswap, 1inch Exchange, MEXC, OpenOcean, and DODO BSC.