TerraUSD (UST) is an algorithmic stablecoin that’s designed to track the price of the US dollar. UST is built on Terra, a blockchain designed specifically to support stablecoins and leverage them in DeFi applications. Users can mint stablecoins like UST on the Terra network by burning LUNA tokens, but they can also burn stablecoins to mint LUNA. UST’s peg to the dollar is maintained through market mechanisms implemented in the Terra protocol. When the price of a Terra stablecoin like UST is too high, users are incentivized to burn LUNA to mint new stablecoins and expand their supply. If the price is too low, users are incentivized to mint LUNA by burning stablecoins and contracting their supply.