USTC doubles in a day, why does the stablecoin project Mint Cash make the market so FOMO?

Author: Chen Mo, Founder of BV DAO

Affected by the expectations of the airdrop for the new stablecoin project Mint Cash in the Terra ecosystem, USTC surged dramatically. BV DAO founder Chen Mo briefly introduced the Mint Cash project and the team behind it, as well as market expectations, to clarify the connections between the widely circulated image of Celestia+Nomic+Anchor.

1. The Information Gap Behind the Surge

It is not the community proposal circulated externally; that proposal has not yet entered the voting stage and is merely a discussion on a forum. The core reason is more likely the new project Mint Cash @wemintcash that members of the Anchor team are about to participate in, along with the new version of the Anchor Protocol @SailOnAnchor.

2. What is Mint Cash?

A stablecoin system backed by BTC, based on the original Terra Classic codebase.

3. What is the connection between Celestia, Nomic, and Anchor?

Mint Cash is an IBC chain derived from Terra Classic, so the DA layer should utilize Celestia, and the issuance of the stablecoin will use Nomic's nBTC. A new version of the Anchor Protocol named Anchor Sail @SailOnAnchor will be released in Mint Cash.

The new version of Anchor Sail holds a crucial position in Mint Cash, playing a key role in the growth and anchoring of the stablecoin.

4. Who are the team members?

The core developers come from the former Anchor team and Aleph Research, and their developers are also planning to build a Polaris EVM support based on Cosmos SDK together with @CosmWasm and @Berachain.

5. Mint Cash will cold start through $USTC in 2 ways

(i) Holding $UST or $LUNA before the crash on May 10, 2022

(ii) Locking and burning a specified amount of $USTC through Mint Cash's airdrop

The airdrop algorithm has not publicly disclosed detailed calculation methods, but the current rumor is that USTC will be calculated at a valuation of $1, which is also one of the FOMO points in the market.

6. What are the returns?

This question is likely the most concerning for the market. Currently, the circulation of $USTC is 9 billion, and many people directly use this number to estimate the new project's valuation to be nearly 10 billion. However, it is clear that not all circulating $USTC will enter the new project; a reasonable estimate might be 1/3 or 1/2, meaning that at a $1 valuation, the new project's valuation could be between 3 billion and 4.5 billion. The FDV of LUNA 2.0 is currently 800 million, so you can calculate your own price point based on a discount from $1.

If calculated based on the pre-surge price of 0.014, it would be approximately 40M-60M. According to current market feedback, the market believes this valuation is low and has high odds.

Of course, there is also the question of your expectations for the new team, as this is currently a project with only a white paper. If you are a rational-thinking investor, you should delve deeper into understanding the team and reviewing the white paper. But if you are an old degen, you might find it quite appealing.

7. Market Reaction

From the concept of Celestia+Nomic+Anchor to the surge of $USTC, it took about 3-4 days or even nearly a week. In the previous days, the coin price showed no fluctuations at all. Additionally, the liquidity of USTC is very good; it is not the kind of depth that can be moved with hundreds of thousands or millions. Just last night, the trading volume on Binance alone exceeded 100 million, and it continues to grow today.

Moreover, the goal of Mint Cash is not to bring $USTC back to 1, but to launch the new project. Simply put, your valuation expectations for the new project determine the current price expectations for $USTC.