The Stock Market is Insane, Housing is Cooling, and UST Loses its Peg…

It’s been a wild week as an investor….but the show must go on

This week has been insane in the world of cryptocurrency. Last weekend, there was talk that there were issues with the Terra ecosystem.

Billions of dollars of liquidity started moving out of the Anchor Protocol (a platform known for paying almost 20% yield) and the UST algorithmic stable coin slightly lost its peg.

At that point, the Luna Foundation Guard stepped in to tap its reserve to stabilize UST.

For those that are unfamiliar with UST (terra, not tether), it’s an algorithmic stable coin that uses code to maintain its price at around $1 based on a complex system of minting and burning.

A UST token is created by destroying some of the related cryptocurrency luna to maintain the dollar peg.

It’s important to note that, unlike the USD coin, terra isn’t backed by any real world-asset classes (a reason I never invested — way too high risk for being touted as “stable”).

Earlier this week, terra was completely unpegged. Even though the Luna foundation fought to restore the peg — terra, at the time of this post — is virtually at zero — making it worthless.