Famed Bitcoin Enthusiast Max Keiser Hints That Cardano’s ADA Could Be Next To Collapse After LUNA

Terra's LUNA, the crypto that backs its dollar-pegged algorithmic stablecoin UST, lost nearly 94 percent of its value in a single day, kicking off what will undoubtedly be a historic week in the crypto industry. It hasn't been an ordinary crash, but rather an excruciating freefall.

Cardano's native token ADA, according to Bitcoin permabull Max Keiser, might follow in the footsteps of LUNA and crash hard.

Is ADA Next to LUNA?

Terra's ecosystem is collapsing. Algorithmic stablecoins, such as Terra's UST, are automatically tied to the price of another currency. Users can exchange 1 UST for $1 LUNA at any moment, thereby burning the UST and removing it from circulation. This algorithmic relationship contributes to the dollar's stability.

Terra's UST stablecoin has recently strayed away from the $1 price target, despite adding a multi-billion-dollar bitcoin reserve as additional backing. On Sunday, UST began its downward spiral, causing LUNA to drop by roughly 11%. The stablecoin fell to as low as 30 cents yesterday after a $1.5 billion bitcoin loan from the Terra-supporting Luna Foundation Guard (LFG) failed to keep it afloat on Tuesday.

Terraform Labs CEO Do Kwon has highlighted the way forward for UST and LUNA in the wake of this week's potentially unparalleled collapse, as a news source previously reported. His primary goal appears to be to restore UST to its previous level.

Meanwhile, as the crypto world deals with the Terra disaster, Cardano founder Charles Hoskinson has ruled out the idea that the network's Djed stablecoin may lose its dollar peg as well.

Hoskinson of Cardano explains why Djed is unlikely to take the UST route.

The UST fall, according to Hoskinson, was caused by a concerted attack that may affect any decentralized finance (DeFi) protocol or cryptocurrency. He stated that such an attack may be carried out by both hackers and traders, as long as an exploit can be located and exploited.

Cardano-based Djed, like UST, is a decentralized algorithmic stablecoin. It does, however, use smart contracts and the Shen reserve coin to keep the price constant. Any changes in the ADA price are mitigated by the reserve asset, which covers deficits and protects the collateralization rate.

Nonetheless, some doubters feel Cardano is not completely immune to the Terra ecosystem's recent calamity. "Will you be the next LUNA?" bitcoin maxi In a recent tweet, Max Keiser inquired.

Hoskinson mentioned in another tweet that Cardano uses "overcollateralization" to keep the Djed stablecoin anchored to the dollar.

Stablecoins that are collateralized are backed by other financial assets, such as traditional assets or cryptos. Djed's collateralization system is distributed. Users who mint Shen and deposit ADA tokens in the liquidity pool generally keep it afloat.

It's unclear whether Cardano's Djed stablecoin, which is overcollateralized and decentralized, will stand the test of time. Cardano creator Charles Hoskinson has ruled out the idea of the network's Djed stablecoin losing its dollar peg as the crypto world deals with the Terra disaster.

Hoskinson of Cardano explains why Djed is unlikely to take the UST route.

The UST fall, according to Hoskinson, was caused by a concerted attack that may affect any decentralized finance (DeFi) protocol or cryptocurrency. He stated that such an attack may be carried out by both hackers and traders, as long as an exploit can be located and exploited.

Cardano-based Djed, like UST, is a decentralized algorithmic stablecoin. It does, however, use smart contracts and the Shen reserve coin to keep the price constant.

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