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May 2022 witnessed one of the major catastrophes in the history of cryptocurrency. The Terra blockchain’s main cryptocurrencies, LUNA and the UST stablecoin, crashed and became virtually worthless in just a few days. The obliteration of UST was particularly notable, as this crypto stablecoin had been pegged to the U.S. dollar with a functional mechanism designed to ensure rate stability. When UST lost its peg to the dollar in early May, most investors lost confidence in it and its sister token, LUNA, almost instantly.
After the Terra ecosystem crashed, the blockchain was rebranded to Terra Classic, and new iterations of the LUNA and UST tokens — called LUNC and USTC, respectively — were launched. While USTC was still envisioned to achieve parity with the greenback, it was worth less than a cent at the time of the rebranding. In fact, until recently, USTC rarely rose in value above a couple of cents.
However, a combination of factors has taken the stablecoin from $0.013 on Nov 25, 2023 to over $0.06 a week later. With this recent impressive rally, USTC has been catapulted into the spotlight — and the possibility of it once again achieving parity with USD is being actively discussed.
Key Takeaways:
TerraClassicUSD (USTC) is a cryptocurrency on the Terra Classic blockchain that’s designed to maintain an algorithmically controlled peg to the U.S. dollar. However, at the moment, USTC’s peg maintenance mechanism has been disabled, and the token trades in a free-floating format.
USTC is currently in the midst of a significant price spurt, supported by supply cuts and renewed enthusiasm about its ability to repeg to the U.S. dollar (USD or US$).
Although USTC’s chances of attaining parity with USD are slim, the token still has some growth potential.