On May 12, the TerraUSD (UST) decoupled from the US dollar, falling as low as $0.609. While UST is powered by the Terra chain and its native asset Luna coin, the price of cryptocurrency Luna fell below $2 at one point, with its market value down to $1.1 billion after two consecutive days of slumping. Luna, once ranked fifth in the whole network.
Besides, as the shock absorber of UST fluctuations, Luna helps traders always exchange $1 UST with $1 Luna. According to coingecko, Luna has skyrocketed from a low of $0.12 to $119.50 , and also reached the highest market value of $41 billion.
Due to the constant slump of cryptocurrency, 150,000 people had a margin closeout, with $107.3 billion in nearly 24 hours. On May 11, Do Kwon, the largest holder behind UST and a South Korean cryptocurrency entrepreneur, announced his latest plan in a tweet: to increase BasePool from $50 million to $100 million in SDRs and reduce the Pool Recovery Block from 36 to 18, which would increase the UST minting capacity from $293 million to $1.2 billion.
It is worth mentioning that The Federal Reserve issued a semi-annual Financial Stability Report on 9 May, warning that stable currencies linked to hard currencies such as the US dollar may depreciate under pressure or loss liquid asset support.