Top Cryptocurrency Trading Platforms Binance LUNA and UST withdrawals have been halted due to network congestion and slowness. Due to the large amount of outstanding withdrawals, LUNA and UST withdrawals were suspended on May 10 at 2:20 am UTC. According to the exchange, withdrawals will resume once the network stabilizes and the amount of pending withdrawals is reduced.
Withdrawal on Terra Network $luna Temporarily suspended. https://t.co/hIGrAEzOwD
– Binance[@binance] 10 May 2022
Terra’s algorithmic stablecoin, UST, had to face As mentioned earlier, a free fall after losing its peg. Terra (LUNA) is now trading at $31.79, down 48.59% over the past 24-hours, while the UST stablecoin is now trading at $0.914, down 9% from $1.99.
On May 10, UST Terra, the algorithmic stablecoin of Terra, fell from its $1 peg to as low as $0.61.
Binance: Withdrawals for LUNA and UST tokens on the Terra (LUNA) network were temporarily suspended on 2022-05-10 at 02:20 AM (UTC) due to a large amount of pending withdrawal transactions. This happens due to network slowdown and congestion. https://t.co/29cFnmkGUe
— Wu Blockchain (@WuBlockchain) 10 May 2022
According to blockchain data and crypto market participants, the de-pegging likely resulted from withdrawals by TeraUSD from decentralized projects Curve Finance and Anchor. On Sunday, U.Today reported that Terra’s native asset, LUNA, saw a sharp drop in price as the UST stablecoin lost its peg after dropping $285 million worth of UST tokens on Curve and Binance over the weekend.
Stablecoins are designed to maintain a peg to the value of currencies such as the US dollar, and traditional types of these tokens are backed by assets such as cash or cash equivalents. UST, on the other hand, is an algorithmic stablecoin with no such asset backing, relying on trading and treasury management to maintain its value.
TerraForm Labs CEO Do Kwon earlier this year offered to acquire up to $10 billion in bitcoin to support the UST stablecoin. To help stabilize the digital currency in Terra and Luna and prevent future volatility, the Luna Foundation Guard (LFG) Council has pledged to provide $1.5 billion in loans denominated in both UST and bitcoin.