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0.00%'$DAI Will Die' Tweet Twisted Back on Terra's Kwon as UST Loses $1 Peg
Terra's UST briefly fell below $6.5 billion in market cap on Wednesday morning, allowing DAI to be the fourth-biggest stablecoin on the market for a time.
By Helene Braun
Updated May 11, 2023, 3:43 p.m. Published May 11, 2022, 8:18 p.m.
Just two months ago, Do Kwon, the founder of the Terra blockchain, tweeted to his followers that DAI, a five-year-old stablecoin, would succumb to the fast-rising growth of Terra's stablecoin, UST.
By my hand $DAI will die.
— Do Kwon 🌕 (@stablekwon) March 23, 2022
STORY CONTINUES BELOW
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Fast forward to this week, and it's UST, not DAI, that needs a lifeline.
The algorithmic stablecoin hosted by the Terra Network lost its dollar peg twice this week, falling to as low as 23 cents on Wednesday. As a stablecoin, the price of UST is supposed to keep a value of $1 at all times.
Because of that price drop, DAI, which is built on the Ethereum blockchain, briefly surpassed UST as the biggest stablecoin by market capitalization based on a decentralized finance (DeFi) protocol, and the fourth largest of all stablecoins.
DAI, which is maintained by the decentralized finance protocol MakerDAO, currently has a market cap of $7.54 billion (with a price holding fast to the $1 peg), while UST was briefly at $6.43 billion on Wednesday, according to data from Messari, before rebounding to $12.9 billion in the afternoon.
But there’s still a long way to go before the algorithmic stablecoin reaches its original market cap of around $18 billion, which is what it was before the crash that started three days ago.
In the meantime, the schadenfreude on Twitter was palpable on Wednesday:
— toldya.eth (@realize_f) May 11, 2022
Representatives of Do Kwon have not responded to a request for comment as of press time.
DAI is a dollar-pegged stablecoin, meaning that its value is backed by dollars as opposed to using on-chain mint-and-burn mechanics. But both stablecoins operate in decentralized finance (DeFi) protocols, which is why they are often compared.
DAI is maintained by MakerDAO.
Do Kwon has said he was working on bringing the UST stablecoin back to a $1 value, and tweeted early Wednesday that he was working to "rebuild UST." It was trading at 58 cents at press time, still 33% down over the past 24 hours.
For what it's worth "Do Kwon" was trending on Twitter on Wednesday. Here's a smattering of the pile-on:
Do Kwon literally called everyone poor before a -50% $LUNA dump and a 40% depeg of $UST.
— McKenna (@Crypto_McKenna) May 10, 2022
I've never seen a market humble an individual like this before.
So is Do Kwon actually going to tweet again or will he just remain silent while it all goes to 0?
— sassal.eth 🦇🔊 (@sassal0x) May 11, 2022
I’m waiting for Do Kwon’s next interview where he can apologize to the people for being arrogant and tweeting shit like “DAI will die his hands”. People have lost billions for believing in him. No matter the recovery because damage is already done.
— Ash Crypto (@Ashcryptoreal) May 11, 2022
Helene Braun
Helene is a New York-based markets reporter at CoinDesk, covering the latest news from Wall Street, the rise of the spot bitcoin exchange-traded funds and updates on crypto markets. She is a graduate of New York University's business and economic reporting program and has appeared on CBS News, YahooFinance and Nasdaq TradeTalks. She holds BTC and ETH.
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