“TerraUSD (UST) has lost its dollar peg for the second time in three days, falling to as low as $0.65 on Monday, according to the most recent price estimates from CoinMarketCap.”
An algorithmic stablecoin is a dollar backed by a token whose only value is that it backs the dollar. When confidence goes, both fall together. LUNA dropped 44 percent in a day, and its market cap is now smaller than the stablecoin it is supposed to absorb. The Luna Foundation Guard is throwing its bitcoin reserve at the peg, which is a fancy way of saying the algorithm failed.