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.”
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
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