The failed USTC algorithmic stablecoin (UST Classic) from the infamous Terra project is showing growth of 90%, despite the whole cryptocurrency market being in the red zone on Wednesday.
USTC, which lost its peg to the dollar in early May and fell below the level of 1 cent, managed to revive the quotations of LUNC (Luna Classic), another collapsed token of the Terra ecosystem, with its rapid growth.
At the time of this writing, USTC is trading at 0.78 cents, up 87% today and 850% over the past three days. LUNC, on the other hand, is quoted at 0.000135 cents, up 25% today and 170% since Monday.
What are the reasons?
It is not known for certain what caused such powerful price movements. It seems that everyone forgot about Terra, and the only coverage the project received in the media and on social networks were associated with the controversial head of Terraform Labs, Do Kwon.
Nevertheless, social networks are already full of enthusiasm and excitement for the seemingly defunct USTC and LUNC. The networks are filled with rumors and conspiracy theories about the possible restoration of the USTC peg to the dollar and the participation of big players in such a suspiciously positive event. Interestingly, the rumors also touch on the topic of the possible USTC pegging not to the dollar, but to the cent.
A hypothetical whale play from a month ago.— Sumo (@SumoLuna) June 28, 2022
1) buy 8-10 billion $UST for a penny
2) buy 50% of $LUNC at $.00006 for $200 million
3) burn the $UST
4) turn the $UST <-> $LUNA swap back on
5) $UST re-pegs and off we go
It didn't happen but it's an interesting thought.
It is not clear yet how this story will end, but crypto investors could already see similar movements at the end of May, when Terra collapsed. In any case, you should be careful, and maybe it is better not to even participate in trades like this.