Luna's BTC reserves have vanished as exchanges halt UST withdrawals in the midst of a turbulent 24 hours

 

Luna's BTC reserves have vanished as exchanges halt UST withdrawals in the midst of a turbulent 24 hours

May 11, 2022, 18:05 PM

(Terra is a blockchain protocol that powers price-stable global payment systems with fiat-pegged stablecoins. Terra, according to its white paper, combines the price stability and widespread adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and provides quick and affordable settlements.)

The cryptocurrency exchange's latest move comes after LFG decided to lend $1.5 billion in BTC and UST to defend the latter's peg. On Tuesday, Binance announced the temporary suspension of LUNA and UST tokens, citing a high volume of pending withdrawal transactions as a result of "network slowness and congestion." The cryptocurrency exchange also stated that withdrawals for the two tokens would be resumed once the network was deemed stable and the volume of pending withdrawals was reduced. Terra's official Twitter account issued a statement urging users to exercise caution when using public infrastructure. "If you are using public infrastructure, please do not spam it at this time as we are experiencing naturally high levels of transaction volume," it said. Please be considerate of our public infrared usage. More information on today's events and future plans will be provided later." Withdrawals have also been halted on other prominent platforms such as Kraken and CoinList. FTX, on the other hand, continues to process UST withdrawals. TerraUSD (UST), as previously reported by CryptoPotato, lost its peg to the dollar over the weekend. According to CoinMarketCap data, the third-largest stablecoin by total issuance fell as low as $0.68 before recovering to $0.91. In order to defend its peg, the Luna Foundation Guard announced that it will lend $1.5 billion in Bitcoin and UST to third-party platforms that intend to support the algorithmic stablecoin's peg. The address, which previously held over 70,000 BTC, is now completely depleted. Bitinfocharts is the source. Many critics believe the move has exacerbated the Bitcoin market's sell-off, which has driven it to its lowest price since July 2021. Along with UST, LUNA has lost a whopping 50% of its value in just one day, plummeting to lows not seen since last October amid macro volatile conditions in the broader cryptocurrency market. Several crypto experts were displeased with TFL Founder Do Kwon's decision to link the project to Bitcoin, which is at the heart of the digital asset market. The argument is that, unlike traditional stablecoins, the price stability of algorithmic stablecoins stems from the use of specialised algorithms and active treasury management, which manage the supply of tokens in circulation. .