"I don't debate the poor on
Twitter"
– Do Kwon, Creator of Terra
My Twitter feed has been chirping with TerraUSD's (UST)
death spiral and its (arguably failed) revival plans. If it
weren't for Twitter, or the many thousands who burnt their
fingers (uhm, savings) investing in UST, I probably wouldn't
have tracked UST. I mean, there are more than
19,000 cryptocurrencies and less than 24 hours in a day! But UST's
crash really tickled my curiosity.
What is UST? UST is a stablecoin that pegged its price to
US $1 (until it didn't). A stablecoin is a cryptocurrency whose
value is referenced to a stable asset. This allows stablecoins to
have the technical capabilities of cryptocurrencies, without the
price volatility. Stablecoins may be collateralized (for example,
by being backed by a currency, or a commodity) or (in some cases)
not. UST was an uncollateralized algorithmic stablecoin. It
wasn't backed by any real value. It was a novel stablecoin,
which used complex
