An evacuation of cash is now taking place on the Terra network’s Anchor Protocol, a lending and borrowing protocol.
Terra continues to lose members, with Celsius Network announcing it would no longer use Anchor Protocol. The Terra network’s Anchor Protocol, a lending and borrowing protocol, has lost $535 million as a result of the borrowing platform. The removal occurred on the same day that the Terra losses started.
This equates to $535 million that Celsius Network has withdrawn from Anchor, which is about 261,000 ETH. Deposits of this amount have been made to the protocol since the beginning of the year.
The TerraUSD (UST) stablecoin was a popular deposit option for many investors, making Anchor Protocol an appealing investment. Because it was offering as much as a 20% return on these deposits, investors rushed to take advantage of it.
The Terra ecosystem has been rocked by recent events, which have caused the network to go down twice, as well as millions of dollars in losses for both users and corporations. Many people have speculated on what it may mean for the future after it went down, and the market reaction has been enthusiastic.
Essentially, the Celsius Network is a savings account platform. Various cryptocurrencies may be deposited and rewarded with interest. More and more people are using it to generate some passive money.
It’s logical that they’d want to safeguard their customers by withdrawing the monies. It was implied by Celsius in a tweet.
Trouble for LUNA and the UST
In the wake of the recent market carnage, the Terra ecology and its tokens LUNA and UST have seen their value plummet to historic lows. There has been a scramble to repair the UST stablecoin after it depegged from $1. For the most part, nothing has worked for any significant period of time thus far.
With a $1.5 billion budget, the Luna Foundation Guard and Terra co-founder Do Kwon have both suggested solutions to the issue. This, however, may not be sufficient to halt the decline of an environment already in free fall.
LUNA trade has been halted on many exchanges, while others have issued cautionary statements. However, the larger regulatory consequences may be the most important outcome of this incident. Since politicians have been considering stablecoins for some time, it’s possible that this news may spur them into action.
Also Read: Bitcoin Outperforms Equities Over The Long Run, According To One Economist
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