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2. How does UST work to retain its peg against the USD? (A) The UST is an algorithmic stable coin, which means that there is
2. How does UST work to retain its peg against the USD? (A) The UST is an algorithmic stable coin, which means that there is a fixed amount of U.S. dollars backing it, stored in a Brinks high security vault in Korea. (B) The UST is tethered to a blockchain, which adjusts supply and demand according to the price levels on a particular day. This typically keeps the price within 1 USD. (C) It always exchangeable with $LUNA for $1. Whenever a $LUNA user buys UST, more UST is minted, and $LUNA is destroyed. (D) Every time there is a threat to UST from speculative short attacks, a fork is created which transforms it from proof-of-work to proof-of-stake
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