The past few weeks have been witness to a sharp downturn in the market, with most cryptocurrencies trading in the red. The prevailing panic from this has knocked a well-backed algorithmic stablecoin, UST, to less than a quarter of its value. The cryptocurrency behind the stablecoin, TerraUSD rose in popularity earlier this year when it was pledged that $10 billion worth of bitcoin would be amassed to support its dollar peg.
Over the weekend, it's reported that around $500 million was withdrawn from the Anchor protocol on LUNA. This triggered a downward spiral as investors sold off large amounts of UST, causing it to lose its peg. The market was swamped by the onslaught of investors offloading, so much so that Binance suspended the withdrawals of UST and LUNA.
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