How will the VAT crash affect other stable coins?

How will the VAT crash affect other stable coins?

Although Terra USD (VAT) has lost its bond with the dollar in the past few days, crypto managers said that not all stable coins were imminent fate.

Brad Yasar, CEO of Defi-platform Eqifi found that the StableCoin market will suffer as a whole.

The prices of the largest stablecoin, Tether (USDT), and the second largest, USD Coin (USDC), remained around $ 1 on Wednesday afternoon. Both are contrary to VAT, which tries to maintain its stability by creating or destroying the stock of VAT by an exchange with the native token luna of the terra blockchain, securing by assets.

"The asset-backed stablecoins-as long as their reserves of the number of coins in circulation-do not tend to break away from market movements," said Yasar. "Algorithmic stablecoins, which have not yet been secured with assets, have been decoupled by violent market movements."

VAT, which now has a market capitalization of around $ 13.95 billion, was rated on Wednesday at 2:30 p.m. ET with about $ 0.68 were . Luna was 94 % in the last 24 hours in the last 24 hours.

About 350 million VAT were exchanged with the curve protocol that left more VAT in comparison to other stable coins and reduced its value accordingly A blog from Grayscale Investments.

The remaining part of the VAT withdrawn from the Anchor protocol was sold on centralized stock exchanges, which also pressed the value down in these markets.

Terra founder Do Kwon said on Wednesday in a Twitter thread that the only way will be to absorb the stable coin offer that wants to get out before VAT can start setting up.

"Terra's return to the shape will be an unforgettable sight," said Kwon.

A spokesman for Tether noted that USDT was the Liquidest StableCoin on the market, and added that the company did not believe that the situation of VAT means something for the centralized StableCoin market.

"Tether has withstanded several" Black Swan "events in cryptocurrency," said the representative Blockworks in an email. "The collapse of the VAT-Peg is one of these events. We are proud to be able to say that the 1: 1 bond at the doll was successfully maintained and that Tether has never failed to take back a return of a verified user fulfill. “

The volume of Tether in the last 24 hours was around $ 140 billion (as of 2:30 p.m. et).

Gabor Gurbacs, Director of Digital Asset Strategy at the Fundsgruppe Vaneck, said in a tweet that Bitcoin and USt are the most reliable reserve assets for the crypto room.

"Tether markets, repository, trade, order books and the bond look neat and healthy," he said to block works. "I don't think Tether should be compared with VAT."

Ryan Shea, a crypto economist in the crypto index trading platform Trakx, said that the StableCoin market should be “a zero game”. He found that the dramatic drop in prices from VAT will probably lead to a shift of algorithmic stable coins to secure stable coins because the market loses confidence in the stability mechanisms of the former.

"Some people could be tried to get rid of other algorithmic stable coins or even shorten," said Shea. "Consolidated stablecoins and/or centralized stock exchanges can benefit."

Several new algorithmic stable coins have been launched on the market, which reflect the Signiorage model used by VAT, such as: B. usn issued on the near-protokoll , but the market capitalization is a fraction of VAT. The next parallel is the neutrino USD from Waves ( usdn ) with a market capitalization of 830 million US dollar in April and in the last 24 and in the last 24 Hours of about 9 % and at 2:30 p.m. ET at $ 0.88 is traded.

Mark Basa, director at Hokk Finance, argued that stable coins were the entry point for late users of the cryptor compartment.

"I think this will affect other stable coins or at least drive 1: 1 supporters such as USDC," he said. "The StableCoin market will react to the fact that this player leaves the room, and now more trustworthy coins and tokens secured by assets can occur."

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The contribution How will the VAT crash affect other stable coins? is not a financial advice.