Cryptocurrencies
Terra Crunch Shakes Foundations of Crypto Stablecoin Complex
- MakerDAO, Dai and Fei stablecoins also decline in value
- Tether calls algo coins ‘entirely different types of assets’
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Stablecoins besides TerraUSD are failing to live up to their billing as the collapse of the algorithmic token has investors pondering the implications of the tumult for the broader market.
Most rival algorithmic stablecoins, which use a complex combination of computer code and trader incentives to maintain their pegs of one-to-one to the dollar, are also below that threshold -- though not at the 80% extreme seen on TerraUSD on Wednesday. MakerDAO’s Dai slipped 0.4% before recovering to its peg and Fei slipped 0.5%. Neutrino USD fell 20% over the same period of time, according to data from CoinMarketCap.