I am thinking of putting a large stack of money into ust and depositing it onto anchor protocol but i am starting to have major concerns about ust maintaining its peg. From my understanding ust is not backed by any reserve and is solely backed by luna the native currency of the blockchain.
Ust relies on an algorithm and arbitrage to maintain its peg and i was wondering how this is any different to iron finances stable coin a few months ago. If my understanding is correct is, when lunas price begins to fall it could result in more selling of luna to cover liquidations which will result in the price being driven down even further all the way down to zero.
Can somebody explain how i am wrong and ease my worries?