TerraClassicUSD (UST) is the decentralized and algorithmic stablecoin on the Terra blockchain. It is a scalable, yield-bearing coin with its value pegged to the US Dollar. TerraClassicUSD was designed to deliver value to the Terra community and provide a scalable solution for DeFi amidst the significant scalability challenges faced by other leading stablecoins like Dai. Consequently, TerraClassicUSD offers users enhanced scalability, precise interest rate accuracy, and interchain utility. TerraClassicUSD offers several advantages that distinguish it as a competitive stablecoin. Its minting mechanism allows UST to meet the requirements of DeFi protocols without compromising scalability. UST can also be easily incorporated into crypto wallets by integrating TerraClassicUSD as a payment method. Additionally, TerraClassicUSD has demonstrated its effectiveness in DApps. For instance, platforms that mint fungible synthetic assets and track real-world asset prices utilize UST as a pricing benchmark. TerraClassicUSD (UST) was launched in September 2020, in collaboration with Bittrex Global, and has since garnered a reputation as the most scalable stablecoin. UST can be used alongside LUNA, Terra's non-stablecoin cryptocurrency, or as a standalone token.

Do Kwon and Daniel Shin founded Terra (LUNA) in April 2019. In September 2020, they launched TerraUSD on Bittrex Global. Since its launch, TerraUSD has surpassed many stablecoin competitors in the market, such as GUSD (Gemini) and PAX (Paxos). Terra operates on its own blockchain, the creation of Terraform Labs, a subsidiary of Terra Alliance. Do Kwon is the CEO of Terraform Labs. He previously worked as a software engineer at Microsoft and Apple. Additionally, he was the CEO of Anyfi, a startup that provides decentralized solutions for wireless mesh networks. Kwon is also recognized in the Forbes 30 Under 30 list of the world's most successful entrepreneurs. Co-founder Daniel Shin is a skilled economist and entrepreneur. Before his association with Terra Alliance, he co-founded Fast Track Asia, a startup incubator, and successfully co-founded and led TMON (Ticket Monster), a South Korean e-commerce platform.

* Enhanced Scalability - TerraClassicUSD is an algorithmic stablecoin with a value pegged to the face value of minted stablecoins. To issue 1 TerraClassicUSD, 1 LUNA reserve asset must be burned. This monetary policy allows TerraClassicUSD to scale almost without limitation, thereby enabling DeFi projects to maximize their potential. * Easy Exchange - The stablecoins in the Terra ecosystem share total liquidity, allowing for the exchange of TerraClassicUSD for TerraKRW (the stablecoin pegged to the Korean Won) with minimal fees. * Passive Income Potential - Users can earn passive income using TerraClassicUSD through the Anchor protocol's stable interest rates. Anchor is a lending protocol offering a 20% return on UST savings. Additional and steady income is provided through rewards in PoS chains, which maintain stability through commissions and inflation. This aspect allows for the establishment of a reliable interest rate. * Interoperability - With the Dropship bridge protocol, TerraClassicUSD facilitates the connection of blockchain ecosystems. Dropship integrates TerraClassicUSD into numerous DeFi and DEX platforms and, importantly, enables asset transfers between chains. The supply and demand of LUNA determine the value of TerraClassicUSD. Thus, a stable UST cost is assured as the Dropship protocol helps maintain scalability. To summarize, TerraClassicUSD (UST) is the first decentralized stablecoin that provides interest earnings, exceptional scalability, and seamless interchain movement.

On May 9, 2022, TerraClassicUSD (UST) lost its peg, plummeting from $1 to a low of $0.68. At the current time, it remains uncertain if UST will reclaim its peg. When UST commenced trading slightly below its dollar peg, the Curve pool containing UST was progressively depleted as investors exchanged their UST for alternative stablecoins. Concurrently, short selling of LUNA, which serves as the collateral for UST, caused LUNA's price to decline. This downward price pressure obliged Terra to mint additional LUNA in an effort to halt the decline of UST. This action diluted LUNA's price without reestablishing the peg. Even the sale of $1.5 billion in Bitcoin from Terra's treasury failed to restore confidence in UST. Much like a bank run, UST holders preferred accepting minimal returns on their UST rather than exchanging it for LUNA. You can read the full breakdown of the UST depeg on Eulerpool.

The Luna Foundation Guard (LFG) is the organization responsible for overseeing Terra, the company behind the LUNA and UST tokens. LFG garnered significant attention when it consistently acquired Bitcoin, resulting in a record high for LUNA just one month prior to the UST depegging. Despite LFG's stated objective of amassing $10 billion worth of BTC, it was compelled to liquidate its Bitcoin reserves in a bid to restore the UST peg. Currently, it remains uncertain whether LFG will resume purchasing Bitcoin in the future.

TerraClassicUSD (UST) is a stablecoin developed on the Terra blockchain. The UST token lacks technical backing; instead, its creation is facilitated by burning LUNA tokens. The value of UST varies due to being influenced by the supply and demand dynamics of the asset and its relation to the US dollar. When the value of UST exceeds a dollar, LUNA holders have the opportunity to exchange their tokens for UST. This increase in UST supply, in turn, boosts LUNA prices. Conversely, when supplies are reduced for profit, UST tokens can be sold for Terra (LUNA), which realigns the UST price to its target level. Consequently, a portion of LUNA is burned, contributing to scarcity and enhancing their value. As of June 2021, the maximum supply is approximately 1.93 billion UST. Its scalability and functionality attributes make TerraClassicUSD (UST) one of the most notable stablecoins in the cryptocurrency market.

TerraClassicUSD (UST) is designed to maintain parity with the US dollar, supported by Terra (LUNA). LUNA serves as an asset reserve, maintaining UST's stability and security through the seigniorage process, which is the income generated from money issuance. Miners are crucial to the security framework of TerraClassicUSD. They engage in a proof-of-stake (PoS) consensus mechanism, contributing to stability by mitigating short-term demand fluctuations for TerraCurrency. A stable demand for mining is a critical requirement for ensuring both security and stability. Consequently, the TerraClassicUSD protocol aims to deliver stable rewards under all economic conditions, thereby compensating those who protect and develop the network. For further detailed information on TerraClassicUSD, refer to Eulerpool.

To purchase TerraUSD (UST), it is necessary to have Bitcoin or Ether available for exchange to UST on the platforms where the token is offered. These platforms include KuCoin, Uniswap (V2), Bittrex, Bitfinex, Gate.io, PancakeSwap (V2), Sushiswap, Terraswap, 1inch Exchange, MEXC, OpenOcean, and DODO BSC. Further information on acquiring Bitcoin and other cryptocurrencies is available through our educational resource — Eulerpool Alexandria.

Following the UST depeg, Do Kwon proposed a revival strategy to split the Terra blockchain into a new chain, referred to as Terra or sometimes Terra 2.0. The original Terra chain would persist as Terra Classic. This revival strategy was approved through a community vote, leading most DeFi DApps to migrate to the new Terra 2.0 chain. Currently, UST is known as TerraClassicUSD (USTC) and is traded exclusively on the old Terra Classic blockchain. According to Do Kwon, there will be no migration of USTC to Terra 2.0, nor will there be an updated version of the algorithmic stablecoin. As a result, TerraClassicUSD is effectively a defunct stablecoin and is not anticipated to regain its dollar peg in the future.

Anchor Protocol is a decentralized savings protocol that provides low-volatility yields on TerraUSD deposits. The Anchor yield, approximately 19.5%, is generated from staking rewards from major proof-of-stake blockchains and interest paid by borrowers. The community believes it could become the benchmark interest rate in the crypto world. Total deposits on Anchor increased from $2.5 billion in early December 2021 to over $6.5 billion currently. Presently, over $10 billion worth of UST, including collateral, is locked in the protocol as cryptocurrency users flock to benefit from the attractive yields during the market downturn. Consequently, concerns have arisen about the protocol depleting its yield reserve, estimated at around $2 million per day, to sustain the high benchmark returns. On February 18, 2022, Terra's founder, Do Kwon, announced an Anchor yield reserve augmentation of $450 million. The yield reserve now exceeds $500 million.