Co-founder of terraUSD stablecoin tries to stabilize crypto prices with tweets

Cryptocurrency terraUSD, a stablecoin – a token to a traditional asset such as the dollar – has plummeted this week. However, its co-founder, Do Kwon, on Twitter, stated that in the future, it will be backed by reserves instead of a ballast algorithm. An attempt to stabilize prices.

terraUSD, also known as the ‘UST’, dropped below its 1:1 peg to the dollar this week, further stirring up cryptocurrency markets – which were already buzzing as bitcoin devaluation hit an all-time low. almost 17 months.

The cryptocurrency dropped below $0.30 on Wednesday (11), before rebounding to $0.60, according to pricing website Coingecko.

Unlike most other major stablecoins backed by other assets, TerraUSD’s value is derived from complex algorithmic processes tied to another token called luna.

The co-founder of the company behind terraUSD then outlined a turnaround plan in a series of tweets, saying the company will seek external funding and make the crypto backed by reserves, rather than relying on an algorithm to maintain its indexing. of 1:1 dollar.

11/ Naturally, this is at a high cost to UST and LUNA holders, but we will continue to explore various options to bring in more exogenous capital to the ecosystem & reduce supply overhang on UST.

— Do Kwon 🌕 (@stablekwon) May 11, 2022

Do Kwon also said that the company will endorse a proposal from UST holders to increase the ability to create new luna coins. This move “should allow the system to absorb the UST more quickly,” he said.

Do Kwon sought to reassure investors, saying in a tweet: “Short-term setbacks do not define what you can accomplish” and describing the stablecoin collapse as a “setback.”