In the digital currency world, stablecoins have recently acquired popularity. One of them is Terra (LUNA).
Because cryptocurrencies like Bitcoin, Ether, and Dogecoin have gotten increasingly unpredictable in recent months, crypto investors are increasingly turning to stablecoins like Terra for investment.
Many crypto fans have invested in stablecoins because of their more predictable and stable pricing.
What Is Terra?
Terra is an open-source blockchain platform for algorithmic stablecoins backed by regular fiat currencies. Terra’s native currency, LUNA, is a versatile token in the network critical to the platform’s growth.
The Terra US Dollar, or UST, is a cryptocurrency tied to the US dollar via an algorithm.
According to The Fortune, Terra is a stablecoin designed to lessen the volatility associated with cryptocurrencies such as Bitcoin. Another stablecoin, Tether, is linked to more traditional currencies, such as the US dollar, using cash and cash equivalents rather than an algorithm accompanying reserve token.
Terra was founded by Do Kwon and Daniel Shin in 2018. Kwon is also the founder and CEO of Terraform Labs, responsible for the Terra protocol and ecosystem.
What Is LUNA?
The Terra cryptocurrency is known as LUNA. It allows users to pay network fees, vote in elections, stake in the Tendermint Delegated Proof of Stake consensus mechanism, and peg stable coins.
You can buy LUNA on BuyUcoin and then store it, and participate in governance with Terra Station, the Terra blockchain network’s official wallet and dashboard.
The Terra ecosystem’s consensus mechanism allows LUNA holders to stake their tokens. Users who stake LUNA receive rewards derived directly from Terra protocol swap fees. When users switch between LUNA and a Terra stablecoin, they must pay these fees.
How Does It Work?
Terraform Labs does not profit from cryptocurrency transactions. It runs on outside funding, according to Kwon. According to deal-tracking service PitchBook, it has raised $57 million from investors such as HashKey Digital Asset Group, Divergence Digital Currency Fund, and Huobi Capital.
Is Luna Recovering From Recent Crash?
Luna’s price has not been restored to its previous level, but it has climbed from its all-time low. The price of Luna is $0.00023 at the time of posting, down 99.9% in the last seven days but still over 24,000% higher than its low. Luna’s price was roughly $80 at the start of May.
Luna’s price has dropped 18 percent in the last four hours after stabilizing over the weekend.
Luna’s market capitalization has recovered to $1 billion, down from $20 billion on May 9. While this is still a decline of almost 90%, it is far from the $58 million market cap it reached on May 13.
One cause for the significant decline in Luna’s price is the circulating supply. On May 12, approximately 13 billion Luna were in circulation, up from 343 million before the catastrophe. This has increased to 6.5 trillion Luna as of May 13.
Luna’s price rose marginally to $4.55 when Kwon announced the recovery but dropped considerably lower.
Is UST Recovering?
The UST has failed to rebound, with the TerraUSD stablecoin now trading at 85 percent down from its $1 value.
It’s presently at $0.14, down 27.5 percent in the previous 24 hours. However, it is still higher than its May 13 low of $0.04.
The UST recovery, which would see the stable coin repeg to $1, now appears to be more speculative. While Kwon’s first recovery strategy appeared to prioritize UST repeg, the community disagreed. Instead of blaming UST for Luna’s demise, they preferred to concentrate on Terra Luna and the Layer-1 first before attempting to save UST.
If the Terra community accepts a UST recovery plan, the formerly algorithmic stablecoin may need to embrace certain collateralization aspects.
Is Terra LUNA A Good Investment?
LUNA has increased about 76,130 percent since its low of 0.12 USD on March 18, 2020, making it one of the top performing cryptocurrencies in the last two years. Furthermore, according to market capitalization, LUNA was the seventh most valuable crypto asset in March 2022. According to our LUNA Price Prediction, it will reach $0.00063454 at the end of 2022.
However, there is always the possibility of unanticipated danger while investing. The UST crash had a significant impact on the LUNA coin. As a result, investors must monitor the market and conduct thorough study before making a selection.
Tokens – LUNA, LUNA-INR, INR-LUNA, USDT-LUNA, LUNA-USDT