Behind the big pump of USTC: Analyzing the Mint Cash project and market reaction

Recently, the price of USTC has seen a significant rise, mainly influenced by the anticipation of an airdrop from a new stablecoin project called Mint Cash. This article will briefly introduce the Mint Cash project and its underlying team, as well as the market's response to it.

Mint Cash Project Overview

Mint Cash is a stablecoin system backed by Bitcoin, developed based on the original Terra Classic codebase. The project will operate as an independent chain based on IBC and will likely use Celestia for data availability, while the issuance of the stablecoin will utilize Nomic's nBTC.

The project will also include a new version of the Anchor protocol called Anchor Sail, which will play an important role in the Mint Cash ecosystem, responsible for the growth and price anchoring of stablecoins.

Team Background

The core developers of Mint Cash mainly come from the former Anchor team and Aleph Research. In addition, some developers in the team also plan to collaborate with CosmWasm and Berachain to jointly build Polaris EVM support based on the Cosmos SDK.

Launch Mechanism

The Mint Cash plan will be launched in two ways:

1. Targeting users who held UST or LUNA before the crash on May 10, 2022
2. Participate in the airdrop by locking and burning a specified amount of USTC.

Although the specific airdrop algorithm has not been made public, market rumors suggest that USTC will be calculated at a value of 1 dollar, which is one of the main reasons for the market's FOMO sentiment.

Market Reaction and Valuation Analysis

The total circulation of USTC is about 9 billion, but it is expected that only one-third to half will participate in new projects. Based on a valuation of 1 dollar, the valuation of new projects could be between 3 billion and 4.5 billion dollars. In comparison, the current FDV of LUNA 2.0 is about 800 million dollars.

Before the rise, the price of USTC was about $0.014, with the corresponding project valuation between $40 million and $60 million. Market reactions indicate that investors believe this valuation is low and there is a high potential for rise.

It is worth noting that Mint Cash currently only has a white paper and no substantial products. Rational investors should conduct in-depth research on the team background and the contents of the white paper, while investors with a higher risk appetite may be more interested in this project.

Conclusion

The news about the Mint Cash project took 3-4 days, or even nearly a week, to affect the price of USTC. The liquidity of USTC is good, with daily trading volume exceeding 100 million. It is important to emphasize that the goal of Mint Cash is not to bring USTC back to 1 dollar, but to launch a brand new project. Investors' expectations for the valuation of the new project will directly affect the price trend of USTC.