TerraUSD algorithmic stablecoin (formerly UST and now USTC) was a real failure. In early May, the supposedly stable digital currency lost its 1:1 parity with the US dollar. Today, it is priced at $0.023, a far cry from the intended $1.
Also, USTC is no longer in the plans for the Terra network, which has been hard forked in the last week. The old network was renamed Terra Classic and LUNA became Luna Classic (LUNC). Meanwhile, the new network kept the name Terra and the cryptocurrency LUNA.
However, the idea of Terra 2.0 having a stable digital currency is not entirely ruled out. According to the Terra network “investigator” known as FatManTerra, Do Kwon, CEO and founder of Terraform Labs (TFL) – the company responsible for the Terra ecosystem – would be planning a new decentralized stablecoin built on Terra 2.0.
Stablecoin UST 2.0 is coming?
As reported by FatManTerra, an insider close to the TFL would have revealed that Do Kwon would be designing the new stablecoin.
A verified insider close to TFL has confirmed that Do Kwon is currently working on design plans for a new decentralized stablecoin that will be built atop Terra 2. Fool me once…
— FatMan (@FatManTerra) May 30, 2022
Responding to a user who supported the idea of a new stablecoin, FatManTerra stated that a neutral part of the community might see that subcollateralized “algorithmic” coins like UST, for example, are a bad idea.
Furthermore, it added that fraudulent/malicious actors (referring to Do Kwon) should not be named to fix this issue.
Community rejects new Terra stablecoin
Another Twitter user agreed with FatMan. He highlighted that Do Kwon lost the credibility he had:
“I think its illogical to support Do in this endeavor. Hes had his chance(s). Time for someone else to innovate, hopefully someone with an ounce of self awareness / open mindedness. Trust is essential feature of an undercollateralized/algo stable and Do has none.”, published.
Another FatMan follower considered the new stablecoin being fully guaranteed, unlike UST. About this possibility, FatMan replied that this might even be something to consider.
However, he pondered that he would like to see TFL move away from Terra 2.0. That’s because they are “bad actors and are toxic to space”.
“Even if it’s supposedly fully collateralized, I think many are turned off by anything that Do Kwon touches. I for sure am.,” wrote another Twitter user.