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LUNA drops 20% in a day as whale dumps Terra’s UST stablecoin — selloff risks ahead?

Excessive Terra supply coupled with UST supply contraction coincides with LUNA’s price decline.
Terra (LUNA) has plunged significantly after witnessing a FUD attack on its native stablecoin TerraUSD (UST).The LUNA/USD pair dropped 20% between May 7 and May 8, hitting $61, its worst level in three months, after a whale mass-dumped $285 million worth of UST. As a result of this selloff, UST briefly lost its U.S. dollar peg, falling to as low as $0.98.UST daily price chart. Source: TradingViewExcessive LUNA supplyLUNA serves as a collateral asset to maintain UST’s dollar peg, according to Terra’s elastic monetary policy. Therefore, when the value of UST is above $1, the Terra protocol incentivizes users to burn LUNA and mint UST. Conversely, when UST’s price drops below $1, the protocol rewards users for burning UST and minting LUNA.Therefore, during UST supply reduction, LUNA’s valuation should decrease. Similarly, when UST’

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We współpracy z: https://cointelegraph.com/news/luna-drops-20-in-a-day-as-whale-dumps-terra-s-ust-stablecoin-selloff-risks-ahead

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