Maker’s governance token MKR blew up by over 30% overnight while Terra’s UST stablecoin briefly lost its peg to the U.S. dollar and slipped to $0.30 in the early hours of Wednesday morning.
Maker currently trades for $1,664 dollars a token, a price increase of a little over 35% in the last 24 hours, according to CoinMarketCap.
Maker’s token is used to govern MakerDAO, a decentralized autonomous organization, and Maker Protocol, a software platform; both allow for the creation and management of Maker’s algorithmically dollar-pegged DAI stablecoin.
Maker rises as Terra falls
Maker’s rally comes as rival Terra’s algorithmic stablecoin, TerraUSD (UST), is in the throes of a dramatic price crash. On Monday, the price of UST fell from its dollar peg by 8 cents.
On Tuesday, the Luna Foundation Guard, a non-profit supporting all things Terra (LUNA), voted to lend $1.5 billion in crypto to protect its native UST’s peg. The effort failed to stem the tide, with UST crashing even harder overnight; at 8.45 AM UTC today it bottomed out at $0.2998. The price of LUNA, the currency which Terra burns a dollar’s worth of for every new UST minted is also crashing hard. At its current price of $2.20, LUNA has lost over 90% of its value overnight.
It currently remains uncertain what measures will be taken to re-peg UST, but Terra CEO Do Kwon addressed a nine-tweet thread for concerned Terra supporters. He wrote: “the only path forward will be to absorb the stablecoin supply that wants to exit before $UST can start to repeg. There is no way around it.”
7/ First, we endorse the community proposal 1164 to Increase basepool from 50M to 100M SDR *) Decrease PoolRecoveryBlock from 36 to 18 This will increase minting capacity from $293M to ~$1200M. https://t.co/aqNKzYK2xC
This should allow the system to absorb the UST more quickly.
