In the last couple of days, the world's third-most valuable stablecoin by market cap committed the cardinal sin of stablecoins. UST (CRYPTO: UST), the stablecoin that runs on the Terra blockchain and is pegged to the U.S. dollar, plummeted. At one point overnight, it was worth only about $0.30, though it has since partially recovered to about $0.65.
Stablecoins got their names for one reason: They are stable. They are supposed to be worth what they are backed by. Whether that is gold, real estate, or the U.S. dollar, a stablecoin's only purpose is to maintain its value, something that's not expected of most other cryptocurrencies.
Image source: Getty Images.
Source Fool.com