Blockchain analytics platform Chainalysis analyzed the TerraUSD (UST) collapse in its report released yesterday. Saying that the UST collapse was not the main factor in the recent crypto market decline, Chainalysis stated that the UST collapse accelerated the downward trend in Bitcoin.
Chainalysis stated that the recent decline in Bitcoin (BTC) and cryptocurrencies is related to the correlation of BTC with technology stocks rather than the UST. The report stated that BTC fell in line with the Nasdaq and S&P 500 as it maintained its price correlation.
“Recent declines in the cryptocurrency market seem to be more closely linked to the tech market decline than the collapse of the UST. The UST collapse worsened Bitcoin's bearish trend, but this effect was short-lived. Because the UST collapse ended with the accelerated collapse of BTC ending. Following this, Bitcoin's price action “decreased in the same way as non-crypto tech assets.”
Chainalysis noted that stablecoins saw an increase in trading volume from May 9 to May 12 as a result of the collapse of the UST, according to data from exchanges. Investors of all kinds, from major institutional players to retail investors, sold their stablecoins during the UST collapse.
New UST validator will pass profits and 10% of commission to UST victims
Popular Terra community supporter FatMan becomes a Terra 2.0 validator to help UST victims and increase community management. After weeks exposing Terraform Labs and Do Kwon for mishandling things on Terra, FatMan now has a plan to help the UST victims.
The plan is to launch a standalone validator on Terra 2.0. This validator will be community funded and completely transparent. According to FatMan, this validator will be free of corruption and other foci of power occurring within the Terra ecosystem.
The Verifier will be a non-profit system where all profits and a 10% commission will be used to reimburse the victims of the IHR collapse.