Crypto Shorts Daily News Bulletin

After the Collapse of Terra’s UST, What’s Next for Algorithmic Stablecoins?

Mohak Agarwal

– Terra’s stablecoin UST is trading below its $1 target, after losing 30% of its value in a bank run
– Stablecoin creators believe that collateralization is key to consumer confidence
– The Federal Reserve has identified stablecoins as being exposed to liquidity risks and vulnerable to runs
– Algorithmic stablecoins have failed in the past when market conditions are unfavorable
– Centralized stablecoins also face similar risks
– In order to maintain consumer confidence, stablecoins need to be overcollateralized and decentralized

this way that way gID 4 After the Collapse of Terra's UST, What's Next for Algorithmic Stablecoins?
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