Nansen, a cryptocurrency forensics firm, pointed out four phases of TerraUSD (UST) stablecoin de-peg to the U.S. dollar that occurred two weeks ago.
Last week, the biggest algorithmic Stablecoin, TerraUSD (UST), suddenly fell apart, leading to a massive breakdown in the crypto markets. As a result, UST dived below its $1 peg, putting pressure on Bitcoin and the cryptocurrency market as a whole.
Nansen is an Industry-leading on-chain analytics. Due to the recent breakdown of the UST that affected LUNA, the firm wanted to give an elaborate cause to what has happened to UST anterior, leading to its historic collapse. It disregards the beliefs and states,
"No, UST was not shot down by a single attacker."
According to today's report, the Nansen firm said that the theory about UST being besieged by a powerful entity on May 27, 2022, which has become the most discussed topic on Crypto Twitter, is senseless.
When asked what really happened to the $UST, Nansen pointed out seven wallets that operated in the transaction. They are described as "token millionaires" and "heavy dex traders" that use Nansen's algorithm token millionaires," it is this that brought about the shortcoming of the UST-Tokenomic Luna's design.
The firm further mentions that on May 7, 2022, the wallets began taking UST liquidity out of the Anchor Protocol. (ANC). The protocol (ANC) provides an APY of up to 19.5 percent APY on the UST stablecoin before the Terra (LUNA) predicament. Also, they began forcefully moving liquidity from the Terra (LUNA) blockchain to Ethereum (ETH).
In conclusion, as reported by U.Today, due to the turn of events, UST stablecoin and Terra (LUNA) assets decreased to almost zero levels. This has made the crypto user decline from buying more assets. However, Do Kwon, the founder of Terraform Labs, announced the network's return.
However, the global crypto market is not yet convinced by this report. They refused to add new assets to avoid more loss.