Terra Drops 20% As UST Sees Major Dump, Collapsing Supply To 3-Month Low

Smart contract-enabled blockchain Terra LUNA/USD saw its price fall by about 20% after a purported FUD (fear, uncertainty, doubt) attack targeting its native stablecoin TerraUSD UST/USD.

What Happened: Terra saw a 20% drop and hit a three-month low of about $61 after a whale — cryptospeak for big holder — dumped $285 million of UST on a decentralized finance (DeFi) protocol, according to a Sunday Cointelegraph report. This dump resulted in the stablecoin temporarily losing its peg and dropping to $0.98 per token due to the selloff.

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The report follows Caetano Manfrini — GEMMA Ecosystem Legal Officer — writing in a Sunday tweet that the Terra and its TerraUSD stablecoin saw an attack that was "deliberate and coordinated." According to him, a "massive 285m UST dump on Curve and Binance by a single player followed by massive shorts on Luna and hundreds of Twitter posts."

On Sunday, TerraUSD's market cap decreased for the first time in two months, dropping by 28.1 million while Luna's supply expanded by over 436.75 million. Cointelegraph wrote that the increased supply paired with a stable or decreased market demand is what resulted in Luna's price falling so sharply.