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The TerraUST and Luna crash spells doom for other UST stablecoins in the market, according to the Tether co-founder 16 de ene. de 2025This paper critically examines the mechanics, risks, and implications of algorithmic stablecoins, highlighting lessons from past failures and evaluating emerging solutions. 27 de oct. de 2025LUNA crash highlights the risks associated with algorithmic stablecoins. The altcoin crashed from $115 to $0, wiping out $60 billion from its market value. TerraUSD did not 3 de jun. de 2025Tether co-founder Reeve Collins believes that the TerraUST disaster spells doom for other algorithmic stablecoins. He revealed to CNBC that last month’s crash could be a catalyst 2 de jun. de 2025Tether co-founder Reeve Collins believes the collapse of TerraUSD (UST)since renamed TerraClassicUSDmight be the catalyst that triggers the downfall of other TerraUSD (UST) stablecoin uses an arbitrage mechanism typical of some algorithmic stablecoin arrangements consisting of two coins or tokens: the stablecoin, in this case UST, meant to 18 de may. de 2025The Terra UST depeg debacle has surely shaken investors’ confidence in algorithmic stablecoins. This has manifested quite clearly in the Curve liquidity pool. 19 de may. de 2025Unlike other stablecoins like Tether and USD Coin (USDC) that hold cash and less risky assets to back them, UST relied on an algorithm and a sister cryptocurrency, Luna, to 26 de dic. de 2025The catastrophic failure of UST provides crucial insights into the vulnerabilities of algorithmic stablecoins and the broader cryptocurrency ecosystem. These lessons serve as

TerraUST Disaster Spells Doom for Other Algorithmic Stablecoins? Experts Weigh In

The spectacular collapse of TerraUSD (UST), now known as TerraClassicUSD, and its sister coin Luna, sent shockwaves through the cryptocurrency market. But is this isolated, or does the TerraUST disaster spell doom for other algorithmic stablecoins? Experts are divided, and this article explores the potential fallout.

The TerraUST and Luna Crash: A Recap of the Catastrophe

The LUNA crash highlights the inherent risks associated with algorithmic stablecoins. In a stunning turn of events in June 2025, LUNA plummeted from $115 to virtually zero, wiping out a staggering $60 billion from its market value. This followed the de-pegging of UST, an algorithmic stablecoin that, unlike traditional stablecoins like Tether and USD Coin (USDC) which hold cash and less risky assets to back them, relied on an algorithm and Luna to maintain its peg to the US dollar.

Tether Co-founder: Algorithmic Stablecoins Face Extinction?

According to Tether co-founder Reeve Collins, the TerraUST disaster spells doom for other algorithmic stablecoins. As he revealed to CNBC, the May 2025 crash could be a catalyst for further failures. He believes the collapse of TerraUSD (UST) since renamed TerraClassicUSD might trigger the downfall of other similarly structured stablecoins.

Understanding Algorithmic Stablecoins: A Recipe for Disaster?

TerraUSD (UST) employs an arbitrage mechanism, typical of some algorithmic stablecoin arrangements, involving two coins or tokens. In this case, UST aimed to maintain its stability through a complex relationship with LUNA. The Terra UST depeg debacle has undoubtedly shaken investors’ confidence in algorithmic stablecoins, clearly manifesting in the Curve liquidity pool.

Lessons Learned from the UST Catastrophe

The catastrophic failure of UST provides crucial insights into the vulnerabilities of algorithmic stablecoins and the broader cryptocurrency ecosystem. These lessons serve as a critical examination of the mechanics, risks, and implications of algorithmic stablecoins, highlighting past failures and evaluating emerging solutions. Many are questioning whether algorithmic designs are inherently flawed, citing the reliance on market participants to maintain the peg. This paper critically examines the mechanics, risks, and implications of algorithmic stablecoins, highlighting lessons from past failures and evaluating emerging solutions. 27 de oct. de 2025

The Future of Algorithmic Stablecoins: Hope or Hopelessness?

While the TerraUST collapse has undoubtedly cast a long shadow, some argue that improved designs and risk management strategies could pave the way for successful algorithmic stablecoins in the future. However, the risk remains high, and investors should exercise extreme caution when dealing with these types of assets.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always do your own research before investing in any cryptocurrency.