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Terra USD (UST) lost its peg to the US dollar twice in the past 48 hours in what appears as a major setback for this bright “Ethereum killer”. Indeed, UST, Terra’s native stablecoin, fell as low as $0.68, dealing a major blow to investors’ confidence in the project and its solidity.
Stablecoins are a particular subcategory of cryptocurrencies that are pegged on real-world fiat currencies, such as the US dollar, the Euro, the British Pound, the Brazilian Real, and so on…
UST, along with any other USD-pegged stablecoin, is therefore supposed to always be worth $1, with only minor variations here and there. You understand now why UST falling as low as $0.68 is such a big deal…
With the crypto market being so bloody lately and with even blue-chips like Terra (LUNA) being slashed, where do you find protection in your assets? This article will share some ideas.
Terra (LUNA)
Terra (LUNA) is a project that was introduced in 2019 by Terraform Labs and which generated stellar returns in 2021, performing as much as a 15,000% increase.
This project essentially developed an ecosystem based on a range of decentralised stablecoins with the aim of democratising decentralised finance (DeFi) within the crypto community.
Now, as a stablecoin-focused project, having its main stablecoin, Terra USD, losing its peg to the US dollar represents a major blow that might undermine the project’s credibility in the months to come.
However, with challenge comes opportunity. Indeed, as UST lost its peg and investors their confidence in Terra, the market has been punishing LUNA harshly. Terra’s native cryptocurrency has fallen about 50% in the last 24 hours, and over 60% in the last week.
This creates an opportunity to invest in Terra at a discount, as the project remains a leader in the space, and a so-called “Ethereum killer”. Just as the pillars of the BNB Chain (BNB), Cardano (ADA), Solana (SOL), Avalanche (AVAX), and Polkadot (DOT) still do.
Terra resorts to a Tendermint-based Proof-of-Stake consensus mechanism that is based on the Cosmos (ATOM) software development kit (SDK) and enables the Terra ecosystem to handle about 1,000 transactions per second (TPS), over 65 times more than the Ethereum network.
Last September, Terra underwent the much-awaited Columbus-5 update, one of the “most substantial mainnet upgrades ever.” Notably, Columbus-5 introduced a systematic burning mechanism for LUNA, making it a deflationary asset with a decreasing circulating supply over time.
This upgrade also introduced Wormhole, a bridge linking the Terra and Solana blockchains and which will enable the rapid movement of UST across both networks and increase Terra’s interoperability.
Now trading around $32.00, LUNA has been hammered by investors and now could be a great time to initiate a position. However, investors should keep a wary eye on the evolution of the current situation.
Ethereum (ETH)
With the current volatility, what better than going back to essentials?
Indeed, whenever markets experience turbulence, investors always tend to go back to safe havens such as precious metals, rare resources, or, in the world of cryptocurrencies, established projects such as Bitcoin (BTC) or Ethereum (ETH).
Now the second-largest cryptocurrency and with a 20% market dominance, Ethereum cannot be missed and is not going anywhere in the near future.
Naturally, this project has its issues, notably high latency, slow transaction speed, and expensive gas fees, due to the increasing number of users on its network over recent years. This led to the emergence of other faster and cheaper networks which have now become giants in the field such as BNB Chain, Solana, Avalanche, or Polygon (MATIC).
Nevertheless, Ethereum has remained the uncontestable leader over all these years and is now planning to release its 2.0 version imminently. This upgrade will transition the Ethereum network from Proof-of-Work (PoW) to Proof-of-Stake (PoS), making it considerably faster, cheaper, and less energy-intensive to use than currently.
No exact date has been announced yet for the release of Ethereum 2.0, but it can likely be expected for the end of 2022. When released, this upgrade will generate major tailwinds for Ethereum and undoubtedly generate a new spike in the price of ETH.
Despite its flaws, Ethereum is a mountain of a project you cannot neglect, and with the current ultra-high volatility, it remains one of the best cryptocurrencies to hold onto to weather the storm in relative peace and security.
Mushe (XMU)
Mushe (XMU) is an emerging project that is currently holding a presale for its native utility token, XMU. Currently, XMU is priced at $0.027, a notable increase from its initial price of $0.005.
Mushe is a project focused on the payment landscape, which aims to develop an ecosystem that would combine cryptocurrency and fiat transactions together in order to revolutionise the current status quo where both spheres remain separated.
Based on Mushe’s whitepaper, this ecosystem would be blockchain-based and, similar to Ripple (XRP) or Stellar (XLM), enable users to perform almost-instantaneous transactions in any currency or cryptocurrency, and for a fraction of a cent.
This would enable users to send and receive money easily and cheaply anywhere in the world, something which is still challenging to do nowadays in 2022, in the supposed “digital age”.
In order to do that, Mushe developed a range of products including a crypto wallet, Mushe Wallet, and a native decentralised exchange (DEX), Mushe Swap.
On top of that, these products will be a part of Mushe’s overarching creation, MusheVerse, which will be a digital space entirely dedicated to banking and e-commerce operations.
It will be on the MusheVerse that users will be able to conduct their transactions from one point to another, as well as access certain financial services such as personal online banking, household financing assistance, long-term investment plans, and others.
The first stage of the XMU presale has now entered its last 15 days, and the Mushe team expressed the ambition of reaching the price of $0.50 for the token official exchange listing, expected for July 4th 2022.
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