Will LUNA Regain Its Market Position?


Terra (LUNA): The Pragmatic Perspective

Moving away from today’s conventional cryptocurrencies before we start with Terra price prediction, LUNA has brought about a change as a decentralized financial payment network that replaces the conventional payment stack on the blockchain. Terra uses fiat-pegged stable coins to power price-stable global payments systems.

The unique feature of Terra (LUNA) acts as a major catalyst in entirely removing the hurdle concerning token mining. In a manner, it promotes transparency eliminating the middlemen or permission. Hence instead of the individual cryptocurrencies like Bitcoin etc., the native token of Terra called LUNA, is more like a programmable asset that addresses issues related to speed, scalability, and accessibility. Lets understand the Terra (LUNA) Price Prediction for the future.

Terra Overview

Cryptocurrency Terra
Ticker Symbol LUNA
Price $0.0000187
Price Change 24H -1.10%
Price Change 7D -68.08%
Market Cap $1,219,682,950
Circulating Supply 210,000,000 LUNA
Trading Volume $142,533,031
All Time High $119.18
All Time Low $0.00001675
Terra ROI No Data

Technical Breakdown: What Happened to the Terra LUNA?

From the last few days, Terra (LUNA) rocks the headlines due to sudden price crash. There were many who got wiped out in this crash. To know why LUNA is declining so heavily, it’s essesntial to know the relationship between LUNA and UST.

Terra is a public blockchain protocol deploying a suite of algorithmic decentralized stablecoins which underpin a thriving ecosystem that brings DeFi to the masses. The protocol consists of two main tokens, Terra and Luna.

Terra: Stablecoins that track the price of fiat currencies. Users mint new Terra by burning LUNA. Stablecoins are named for their fiat counterparts. For example, the base Terra stablecoin tracks the price of the IMF’s SDR, named TerraSDR, or SDT. Other stablecoin denominations include TerraUSD or UST, and TerraKRW or KRT.

LUNA: The Terra protocol’s native staking token that absorbs the price volatility of Terra. LUNA is used for governance and in mining. Users stake LUNA to validators who record and verify transactions on the blockchain in exchange for rewards from transaction fees. The more Terra is used, the more LUNA is worth.

UST is an algorithmic stablecoin and its stability is deeply co-related to the LUNA price. If UST loses its peg at $1, then UST is burnt and new LUNA coins are minted. And if UST rises high then LUNA coins are burnt while new UST coins are minted. Therefore, both prices maintain each other’s value. Things got messed up when $285 million worth of UST was liquidated on Curve and Binance.

The UST got de-pegged heavily and Terraform Labs liquidated all their 40K BTC holdings to stabilize the UST peg. This led to a massive crypto crash. Further, LUNA price and UST both started correcting massively. UST lost its peg and the new LUNA coins were minted, which impacted its price heavily. Also, a popular lending protocol Anchor also witnessed huge ANC withdrawals as it offered a 20% yield on UST deposits.

Recent Terra (LUNA) Price Movements

  • The price of Terra (LUNA) dropped when crypto prices fell in January 2022, correcting to $43.57 at the end of the month, but it rebounded to a new high of $119.18 on April 05.
  • On April 05, 2022, LUNA coin has marked an all-time high of $119.18
  • On May 7, over $2 billion worth of UST tokens were unstaked, and hundreds of millions of that was immediately sold.
  • The price of Luna coin declined below $0.84 before leveling off above $1.10, dump more than 90% as UST struggled to regain its $1 price peg on May 11, 2022.
  • The Terra price continued to decline on May 12, 2022, amid problems with its stablecoin UST.
  • The price of Luna declined further due to halts by some crypto exchanges and the blockchain.

What’s Next for LUNA and UST?

After recent enormous fall in Terra’s value, most to the people have once question in mind that, “Can Terra go back up?” or “Can Terra (LUNA) Ever Recover?”. The CEO of Terralabs, Do Kwon, proposed a revival plan for LUNA. He thinks that he has a solution for this scenario by forking Terra Blockchain The new blockchain would be created alongside a billion luna tokens, which would be distributed among current luna and UST holders, as well as fund development of new Terra apps.

The plan needs to be voted on by luna owners, with a vote scheduled for Wednesday. If passed, we will be able to see the current Terra blockchain renamed to Terra Classic, while the new chain will simply go by Terra by the following timeline: