# Trending Project: TerraUSD (UST) 📈

*Author: Ben Giove*
*Published: Feb 8, 2023*
*Source: https://www.bankless.com/de/trending-project-terrausd-ust*

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- **Sector:** Stablecoin
- **Network:** Multi-chain
- **Market Cap**: $18.32 billion
- **Hotness Rating:** 🔥

UST is an algorithmic, dollar-pegged stablecoin. UST is in the midst of a significant stress test as it has experienced significant downward pressure on its peg since May 7. As of writing, the stablecoin currently trades at roughly ~$0.985 on Binance and Curve on Ethereum.

📖* To read more about how [UST works in depth, click here.](https://bankless.ghost.io/could-ust-reach-1t/)*

![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/public/images/55694aa6-5fef-4b39-8c3c-7d4e1af70313_1600x880.png)*UST/USDT On Binance - Source: Trading View*
The de-pegging comes in the midst of major outflows on Anchor, which has seen its UST deposits fall 25.2% over the past 3 days from $14.08 billion to $10.40 billion. Anchor, a money market that has helped to catalyze the growth of UST by paying a fixed rate—currently 18.57%—to UST depositors, holds more than 55.7% of stablecoin’s total supply.

![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/public/images/b01b7762-a44e-40fd-9026-55948e133109_1380x782.png)*Anchor UST Deposits (In Yellow) - Source: [Smart Stake](https://terra.smartstake.io/ust)*
The UST-3CRV Curve pool, the most liquid pool for the stablecoin on Ethereum, has also become imbalanced, currently at a ratio of ~81.2% UST to ~18.8% 3CRV. The pool, which first became imbalanced on May 7, intends to have a 50/50 split between UST and 3CRV (*the base trading pool for stablecoins on the DEX which consists of USDC, USDT, and DAI*). While it holds just ~3.4% of the total UST supply, liquidity drying up may prove to have a significant impact on the market psychology and confidence in the stablecoin.

![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/public/images/24b60c76-79fd-42bc-934d-001ed3ac0df9_1360x742.png)*USTw-3pool Balance Proportion - Source: [Dune Analytics](https://dune.com/queries/685450/1271567)*
Along with the duress of the peg and Curve liquidity, the price of LUNA has dropped more than 30% from $76 to $53 over the past three days. With its circulating market cap falling to $18.24 billion, **meaning the value of LUNA is less than that of all outstanding UST.** As a result, not everyone would be able to exit the system, i.e. redeem $1 of UST for $1 of LUNA, should they choose to.

![](https://storage.ghost.io/c/e4/b7/e4b77544-5a37-4f0b-8824-8440aa348476/content/images/public/images/c11f2123-91d6-49e8-b88f-be83a80d1d6f_1600x159.png)*UST and LUNA Market Capitalization - Source: [Coin Gecko](https://www.coingecko.com/)*
To help stabilize the peg, the Luna Foundation Guard (LFG), announced they will be loaning $750 million of Bitcoin and $750 million of UST to OTC desks. This Bitcoin, which was accumulated as a part of the Forex Reserve fund, will likely be sold in order to help bring the peg back to $1, but in doing so, runs the risk of further bringing down the price of LUNA.

**Hotness Rating (🔥):** DeFi’s largest decentralized stablecoin is undergoing a significant stress test. Terra investors and UST holders should take precautions and monitor this situation closely.