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2021 was the best year for Terra Luna as the LUNA coin managed to reach incredible highs. But the happiness (for the developers and investors) was short-lived as it almost lost 100% of its market cap in the 2022 May crash. Popularly known as the Luna crash, it has been one of the worst hits to date in the crypto market. The fall of LUNA made people lose trust in other assets as well, triggering a market-wide crash.
But the team behind LUNA was fast to move away from this failure. A governance proposal 1623 was passed by the members of the community, which proposed the creation of a new chain altogether and naming it Terra. The old chain was left up-and running and was rebranded as Terra Luna Classic. LUNA is the native coin of the newly built Terra chain.
The new LUNA coin has been airdropped to the holders of UST, USTC, and LUNC coins, making everyone from the previous blockchain a member of this chain too. The new Terra platform has no stablecoins, as was the case with the previous version.
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Terra Platform
Terra is a decentralized payments system that allows users to make transactions in stablecoins that are pegged to fiat currency. Pegging refers to attaching the exchange rate of one currency (here LUNA) to another currency (any fiat currency).
The biggest benefit of stablecoins was that they helped solve the price volatility problem that has plagued the crypto industry. The founders of Terra figured out a way in which investors could be given the best of both a fiat currency and a cryptocurrency.
The Stablecoins were named according to the Fiat Currency it was pegged to like UST (pegged to US dollars).
Terra allowed DeFi solutions to its investors, one of which was staking. Investors could stake their LUNA tokens to validators (blockchain miners) who record and verify the transaction on the blockchain in exchange for rewards.
Why is LUNA on the Rise?
Terra Luna (LUNA) had become the 58th biggest cryptocurrency in the market by way of market capitalization, and the older Terra Luna Classic has managed to become the 28th biggest cryptocurrency in the same category. The coins have been among the top ten best performers in the best week and have even managed to eclipse the likes of Bitcoin and Ethereum when it comes to performers.
Terra Luna has seen triple-digit growth this week, almost leveling at $8 (the price at the time of its offering). The same is also true about Terra Luna Classic (LUNC), which had been on a bullish run for the past two weeks and also managed to cross the $0.0005 resistance level.
The reason behind this growth while the whole crypto market is on a bearish run could be its recent moves regarding burning tokens. Terra LUNA Classic is planning to burn its token on every transaction made (1.2%). This is to be continued till the platform is left with only 10 billion LUNC (at the moment there are 6 trillion). The team has roped-in various exchanges like Huobi, KuCoin, etc., to implement this move. This will result in the automatic burning of 1.2% of the transacted LUNC tokens every time someone buys it.
The burning of the token will help diminish the extra supply of the token and would help in increasing its value because of the increased demand. This is a great stabilization measure adopted by the team. This news has been able to once again bring back the attention of the investors to the LUNA platform, which was lost post it’s crash.
The bigger question now lies with the investor is whether this surge in the price of LUNA is a one-time thing and that it would return back to its previous price bracket or is this a start of a new bull run, the LUNA, which will help it great heights moving forward.
Will LUNA Rise Further and Reach $10?
Having seen the highest of the highs and the lowest of the lows, LUNA investors ought to be anxious about their investments, and the fear of the coin again falling to the ground has to be addressed. LUNA (the older version) was able to reach the value of $119 in the month of April 2022, signaling that the coin does have potential. But the May crash has taken a toll on this potential.
The new coin, too, was able to reach an all-time high of $19, but the short-lived bullish run was followed by yet again a price crunch to the tune of 99% (that too within a single day).
The fact that LUNA is surging in what seems to be a bearish market is positive news for investors. Efforts made by the team in the positive direction might help the coin reach new highs. Also, the picture may get even better once the crypto market gets back on track and help LUNA march towards its new all-time high.
Having said all this, the LUNA coin is still not the best investment option. This is quite evident from the continuous spikes and surges in its value (sometimes, none of them lasting for even a day). This makes LUNA a rather risky investment that may end up either way.
Investors looking for good long-term investment options, in the long run, should consider fresh debuts like Tamadoge (TAMA), Battle Infinity (IBAT), Lucky Block (LBLOCK), etc. All these assets have strong use cases allowing the coin to be stable even in a bearish market. This fact has been very well understood by the new age investors, as is evident from their extremely successful presales.
Conclusion
Terra LUNA has seen a surge in its price in the past week and is currently trading at $4.28. A major reason behind this spike has been the news about burning 1.2% of LUNC tokens on every transaction to control the price volatility of the token.
Although the proposal of burning tokens has been accepted by many exchanges like KuCoin, Huobi, etc., the same has been rejected by Binance, the biggest crypto exchange in the world as per daily trade volume. The news regarding Binance might affect the price of LUNA and end its bullish run.
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