Founder of the Terraform Labs passed clear statement to ensure the crypto Community that they are here to stay.
UST is a popular stablecoin of Terraform Labs. From Monday of this week, the UST coin started to face significant correction because of the fear among the UST coin holders. In the history of the Crypto industry, it was the first time when the crypto industry saw such a type of incident where stable coin almost touched the bottom.
Today Do Kwon, the founder of Terraform Labs, finally responded openly against this situation and said that he knows very well about the past 72 hours and also said that the team will work to fix this issue together.
Kwon quoted a tweet of UST coin explanation tweet and tried to suggest people to understand the UST coin backend real operations.
Kwon explained that the supply of UST is getting down through the selling of Luna coins, that is why Luna and UST both are in this situation.
” The price stabilization mechanism is absorbing UST supply (over 10% of total supply), but the cost of absorbing so many stablecoins at the same time has stretched out the on-chain swap spread to 40%, and Luna price has diminished dramatically absorbing the arbs.”
Overall, he admitted that it is a very big cost to the people who are holding Luna and UST coins, because of this rapid downfall in price.
Kwon also noted that Terra will return to the form and they are here to stay in this industry.
At present time trade price of UST is $0.47 and this is still a very big barrier for the UST coin to cross this situation to regain full trust among the users. Now it is expected that UST coin will gain stability back with the new management in stabelcoin algorithm.