The market price of the troubled coin beginning from April 19 to May 19, 2022, shows how LUNA went from its All-Time High of $119.18 on April 5, 2022, to $0.0001349on April 19, 2022. If the UST is trading below $1, then the UST is burnt, and new LUNA coins are minted. Terra Network's LUNA price has continued to take a beating today as the Terra Network token plummeted 65% in 24 hours. The UST coin was supposed to derive its stability through Luna, also created by Terraform Labs. If so, the next bullish target for is capped between $0.00025 and $0.00033. So, not much UST there. As this happened, the price of the LUNA token consequently reduced by 99.9% three times, taking the price from a solid $119 to a low of $0.00000112. On the Twitter Page of Terra Friday, May 20, 2022, Terraform Labs disclosed that an amendment to Proposal 1623that include the LUNA communitys feedback since its publication to include the following changes: 1. Some investors who lost money in Luna have filed a complaint with local prosecutors claiming that Kwon was involved in fraud and illegal fundraising. After the coordinated attack against Terras algorithmic stablecoin UST, supporters hope the imminent LUNA hard fork will be a lifeline for the Terra ecosystem. Binance, Crypto.com and ATOM are also built using the Cosmos SDK. This led to a huge influx of LUNA in the market, causing the price to fall by over 99% consecutively. The network is the talk of crypto bulls and crypto bears alike in the face of a major price meltdown this week. In fact, there is increased pressure on new tokens to enable numerous use cases. Through the analysis below, we try to determine what factors led to the fall of Terra LUNA, in which investors lost around $40 Bn within a week and its recovery plan. We'll cover why Terra LUNA crashed, what the response was, and how it can be fixed. Orbeon Protocol (ORBN) Presale Continues To Rise, Ripple Pursues CBDC Development, In Talks With 20+ Central Banks. He announced that he would be abandoning the stable coin TerraUST and creating a new chain without the algorithmic stable coin. To bring it back to the levels, the organization liquidated most of its reserves to buy UST and pump up its price. Another wrote that they had lost $15,000 . The community is stalled at the moment but is unlikely to remain so over the next 4 weeks. The logic behind the latest proposal to fork LUNA was stated by Terraform Labs CEO. So, a consumer can borrow against their crypto assets for an unlimited period and a small fee as long as the value of their cryptocurrency is higher than the value of the capital borrowed. Save my name, email, and website in this browser for the next time I comment. For example, Wrapped LUNA is a form of the LUNA Classic token that exists outside outside its native Terra Classic blockchain network. SBF Seeks Expert Assistance In Criminal Fraud Case Amidst Fresh Allegations, Crypto News Today: Markets Remain Sluggish, This is When BTC, ETH May Make a Move Higher, The Author Who Said Bitcoin Will Hit $500K Predicts World Economy to Collapse, #RelistXRP : XRP is listed & Available on Uphold Exchange, Solana (SOL) And Filecoin (FIL) Way Too Unpredictable? The key takeaway should be that if an investment seems too good to be true, it usually is. My #Lunais on #uphold@UpholdInc. To preserve the developers and the ecosystem, Do is planning to "reconstitute the chain". Currently, it is a massacre for the Terra investors, the profits of whom were slaughtered within a period of 48 hours. The organization has now announced that it will readjust its mechanism to be collateralized. "I lost all my life savings," one member of the r/TerraLuna sub-Reddit wrote. Inflation has begun to fall and is below 7%, it is likely that rate hikes will ease a little but unlikely to stop before inflation falls below 4%, Crude Oil is hovering below $90 and has been rising in anticipation of the recovery in Chinas economy, Layoffs in the United States have risen over the last few weeks. How will $LUNAholders on exchange wallets be treated? That said, Cosmos is better than Solana on interoperability and that gives Terra Classic the edge. Focus on increasing genesis liquidityaimed at protecting the small wallet holders. The Terra Luna vote for a Luna fork is now live, with validators approving the plan for a new chain. The recovery plan proposes a cap of 1 billion coins, where 900 million tokens of the new chain are set aside to be returned to LUNA and UST holders from before the de-pegging event and chain. All measures were focussed on two main themes- Burn a significant proportion of tokens and two, enable the technology to encourage Dapps to launch their services on Terra Classic which in turn drives demands Luna Classic Tokens. And as part of remedial measures to aid the pegging mechanism to absorb supply, Kwon endorsed acommunity proposalto expand the minting capacity of the ecosystem to $1.2 billion. You will also come across relevant news, on-chain data analysis and Wrapped LUNA price predictions for 2022 and beyond. The Luna Foundation Guard (LFG) council's recovery of Terraform lab's LUNA and UST has nearly failed as reserves plummet to $71.26 million, and the two tokens fail to recover. If UST goes above $1, then LUNA is burnt while new UST coins are minted. Save my name, email, and website in this browser for the next time I comment. According to the tweet posted approximately 15 hours before press time, Do Kwon teased his followers and UST holders that he is getting ready to release a plan designed for saving UST and, most likely, Luna cryptocurrency, which is down by about 90% for the week. In theory, if this legal action goes through, Kwon would have to return to South Korea within 14 days of receiving the notice of the revocation. Essentially, Terra needs to cut down on the token supply in order to counteract inflation. Also read: Luna Foundation Guard (LFG) sold 46,876 BTC amid Terras death spiral. The goal being, a steady store of value for investors, unlike other volatile coins (like ethereum). What should I do?-. The Ethereum network has grown dramatically since the hard fork. Other questions that have been asked by community holders include: Since all tokens will be distributed, what tokens will be used for Liquidity pools? TerraUSD was risky because it wasnt backed by cash, treasuries or other traditional assets like the popular stablecoin tether. Luna Classic was on a path of recovery between May and September. First, Kwon through Terraform Labs the firm behind UST and LUNA proposed to fork the Terra blockchain which was put into voting for major LUNA investors. However, it is unlikely to be sustainable as numerous experts are predicting that the macro environment will worsen again next year. For LUNA and UST holders, the fork might represent a watershed moment in the tokens recovery. The price fell to 91 cents due to the huge sells. var plc588602 = window.plc588602 || 0; While it was expected that investors would back the new Terra Luna, the reverse happened. Where potential investors are reportedly being offered discounted token prices for purchase. As a result, traders started to change 90 cents worth of UST for $1 of Luna. Through the analysis below, we try to determine what factors led to the fall of Terra LUNA, in which investors lost around $40 Bn within a week and its recovery plan. Bitmart 150m smart chaincopeland theblock, Cryptocurrency investors try turn into utopias, Crypto kazakhstan face bitter winter power, Proponents criticize Do Kwons plan for LUNA recovery, Terra LUNAs collapse dragged the whole crypto market, Luna foundation guard luna btcdenominated ustweeks, Terraform ustchawla theblock terra ust 880m, Terra blockchain will split abandon collapsed. Terra price maintained a significant upswing since the beginning of 2022 trade and reached a peak beyond INR 9000. Fintech & Crypto News Do Kwon Details Recovery Plan, As LUNA's Struggle Continues Do Kwon, the founder of Terra, has outlined a roadmap to recover the project's ecosystem after LUNA crashed 99% from its all-time high to below $1 and TerraUSD (UST) fell out of its USD peg. Earn platform and crypto lender Matrix Port was revealed to be another large creditor of 3AC, however it is not clear what . However, the plan to use MKR as collateral raises widespread concerns where the community sees risks in DAI pegging stability as the move resembles the mechanism run by the now-defunct Terra-LUNA system. LUNA is the native token of the Terra blockchain, along with the UST stable coin. Luna Classic Underperformed most cryptocurrencies between October and February. The crypto exchange stated: "The Terra Classic (LUNC) network upgrade will take place at the Terra Classic block height of 11,734,000, or approximately on 2023-02-28 22:00 (UTC).". LUNC is likely to go down further in the short term after rising a little due to the Binance announcement. LUNC was ahead of LUNA for 22 days in February, and for 17 days in January. The proposal aims to solve the problem of large UST withdrawals against a slow UST burning mechanism. The Terra recovery plan launched Luna 2.0, meaning a Luna burn was not chosen as the way to save Luna. Together. At the current price of $2.18, the token is down 98.3% since all-time highs of $119.18 in April 2022 approximately a month ago. Watcher.Guru (@WatcherGuru) May 14, 2022 The Layer 1 blockchain, which was among the top 10 largest digital assets by market cap, saw the value of its native token, LUNA, tank by 100%. Aptos Price Prediction 2023-2030. The Layer 1 blockchain, which was among the top 10 largest digital assets by market cap, saw the value of its native token, LUNA, tank by 100%. Stablecoins like Tether (USDT) and Circles USD Coin (USDC) are collateral-backed digital tokens whose value is pegged to the US dollar. There is a need for capital to develop the ecosystem for developing and sustaining use cases in the blockchain. Following the tokenomics, the total supply of the new LUNA Core chain would be capped at 1 billion tokens. Notices placed on CoinMarketCap: The original Terra Chain will be rebranded as Terra Classic (LUNC). January was the best month for LUNA 2.0 since August 2022. Even at the time of this update, hundreds of holders are doubtful that the revival plan would work, saying, LUNA is dead. While Inflation has fallen, there isnt too much good news in the economy. Brenda is a crypto and Blockchain enthusiast and has been crafting . In his revival plan, founder Do Kwon talks about Terra possessing a "vibrant developer ecosystem" and "strong brand recognition". Both kits help spread risk across industries, not just investing in a single coin or company, but the entire ecosystem. On May 7, over $2 billion worth of UST was unstaked (taken off the Anchor Protocol), and hundreds of millions of it were quickly liquidated. This site is not intended for use in jurisdictions in which the trading or investments described are prohibited and should only be used by such persons and in such ways as are legally permitted. Terra ended up launching a new coin, Luna 2.0. I also expect the prices to start recovering after the Terra project shows that similar problems will not happen in the future.. Terra is a blockchain network, similar to Ethereum or Bitcoin, that produces Luna tokens. A mechanism for maintaining Terras stablecoin peg. Your email address will not be published. It is why the chain exists. Trust is an essential ingredient in the crypto community, and once its lost, its hard to get it back. Bitcoins price was settled at $36K. In October and November combined, LUNC lost over 50% of its value. He also stressed that the community will play a big part in reassembling the blockchain. One winner that we have to highlight is the hedge fund Pantera Capital. The Singapore-based non-profit that supports the . Terra Luna Recovery Plan Some traders on social media are still optimistic that Terra Labs and Luna Foundation Guard will be able to implement a recovery plan for LUNA. We must salvage the remaining value in the ecosystem & community and rebuild the right way will (@stablechen) May 13, 2022 And moreover, the founder, Do-Kwon has also place a recovery plan which includes enlarging base pool, burning UST and staking LUNA also made some rounds. Luna had been one of the world's most popular cryptocurrencies and its downfall, alongside TerraUSD, caused mayhem across the crypto spectrum globally, with bitcoin losing around a quarter of its . For example, traditional secured lending (Like borrowing against deposits or other liquid assets like shares or mutual funds) is under threat from DeFi-based lending. Many people lost their life savings and suffered financial hardships due to the Luna crypto crash. 3. Proponents criticize Do Kwon's plan for LUNA recovery This led to billions of dollars worth of Luna being mined. It is therefore difficult to say if we have reached the Cryptocurrency market bottom. This could imply that the risk of LUNC crashing is much higher than before should market sentiments turn bad. Coinpedia - Trusted Crypto Agency for News, Information, Exchange, PR, Blockchain Events, Crypto Wallet and Else related to Decentralized World. LUNA and the UST stable coin appear to be in a terrible place right now and investors are keen on knowing how the organization plans to recover from this event. Secondly, with the LUNC community failing to develop new Use cases or partnerships, token usage is unlikely to rise in 2023. Goldman Sachs says crypto crash would not impact US economy, Coinbase delisted Binance USD (BUSD), CEO Armstrong blames liquidity issues, Bank Of England Doesnt Have The Staff For CBDC Right Now. Kwon has been under pressure since the crash. var pid588602 = window.pid588602 || rnd; One retail crypto investor even confessed that they lost their savings of $20,000 in Luna. Sure, but they need a good look at how they can reinvent themselves. Holders, stakers, and developers of LUNC will get rewarded with brand new LUNA tokens that will be capped at 1 billion. . So at the moment, one can say with confidence that, current community activities will NOT spur a recovery in Luna Classic price. When investing your capital is at risk. If UST slipped, traders could make money from buying UST and then exchanging it for Luna. The recovery plan proposes a cap of 1 billion coins, where 900 million tokens of the new chain are set aside to be returned to LUNAand UST holders from before the de-pegging event and chain hold, and the last 100 million tranche is to be staked at the network genesis state. Kwons revival strategy essentially plans to distribute the network ownership to the native token holders, ie. Cryptocurrency industry scandals are likely to recur given the lack of regulation. After the situation got out of hand, Do Kwon announced a recovery. A sell or buy decision is therefore completely dependent on the willingness to lose some money in the hope of gaining a lot. Terra Luna (UST) ranked amongst the 10 most valuable cryptocurrencies until this week, with each token worth roughly $85 (69.69) on May 5. This mechanism was constructed so volatility and UST price dislocations could be smoothed out with UST and LUNA supply expansions or contractions via on-chain arbitrageurs. Wrapped coins can be redeemed for the cryptocurrency that they represent at any given moment. They saw a 100x return on an initial investment of $1.7 million. UST could then recover back to US$1. The Crypto exchange Binance said it supports the Terra Classic network upgrade v1.1.0. The network should incentivize its security with a reasonable inflation rate, say 7%, as fees will no longer be enough to pay for security without the swap fees. So it is fair to say that Luna is unlikely to recover to $100. So if you were looking to make an investment, although risky, you can do it there. As a result, both UST & LUNA's price experienced a precipitous decline, with . Binance CEO does not think LUNA recovery plan will work: Binance CEO, CZ, has revealed that . For UST to retain its peg, one UST could be changed for $1 worth of Luna at any time. The more influential folks in the Luna Community have been toying with the idea of accessing the DeFi apps already on the Terra Luna 2.0 platform. Many success stories popped up in the media about how regular folks were able to get rich from Luna. The price witnessed a downfall due to several reasons and the initial trigger was the hyperinflation in LUNAs supply. Despite the efforts, the stablecoin collapsed. 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