UST - Why USDC Is Becoming the Stablecoin of Choice
Since the meltdown of TerraUSD (CRYPTO: UST) , a stablecoin on the Terra blockchain, the crypto market has been in more than just a lull.
UST was unlike other stablecoins. Instead of using a reserve of assets to back the distribution of the stablecoin, UST used a set of algorithms through smart contracts to ensure the coin would always be worth $1. When some turbulence hit with a broad market sell-off, UST quickly lost the $1 mark. Once it slipped a little, it plunged to depths as low as $0.25 and now trades for about $0.02. The one thing stablecoins should not do.
UST was one of the first cryptocurrencies to attempt pegging without cash equivalents backing it. Other notable stablecoins, like Tether (CRYPTO: USDT) and USD Coin (CRYPTO: USDC) , possess an equal number of cash-like assets proportionate to the number of stablecoins issued -- or at least, so the thinking goes.
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Why USDC Is Becoming the Stablecoin of Choice