Smart contract-enabled blockchain Terra (CRYPTO: LUNA) saw its price fall by about 20% after a purported FUD (fear, uncertainty, doubt) attack targeting its native stablecoin TerraUSD (CRYPTO: UST).
What Happened: Terra saw a 20% drop and hit a three-month low of about $61 after a whale — cryptospeak for big holder — dumped $285 million of UST on a decentralized finance (DeFi) protocol, according to a Sunday Cointelegraph report. This dump resulted in the stablecoin temporarily losing its peg and dropping to $0.98 per token due to the selloff.
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The report follows Caetano Manfrini — GEMMA Ecosystem Legal Officer — writing in a Sunday tweet that the Terra and its TerraUSD stablecoin saw an attack that was "deliberate and coordinated." According to him, a "massive 285m UST dump on Curve and Binance by a single player followed by massive shorts on Luna and hundreds of Twitter (NYSE:TWTR) posts."
On Sunday, TerraUSD's market cap decreased for the first time in two months, dropping by 28.1 million while Luna's supply expanded by over 436.75 million. Cointelegraph wrote that the increased supply paired with a stable or decreased market demand is what resulted in Luna's price falling so sharply.
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