![]() The token currently trades at $0.00015 and remains fairly volatile. Massive shorting, failure of UST to maintain stability, market sentiment, the halting of trade, and a few other minor reasons were all it took to make the LUNA crash happen. As of now, however, LUNA is available for trade on eToro. eToro too, chose to delist the token at the same time. Binance and were among the few platforms to halt the trading of LUNA. The increase in supply is, to a certain extent, unexplainable.ĮToro platform has again listed LUNA after brief delistingĪmidst this crypto crisis, many exchanges choose to delist or halt the trading of LUNA and UST. Before the crash, there were 350 million LUNA tokens in existence, while after the crash, it rose to 6.9 Trillion. Hyperinflation of the Terra and LUNA supply was the major cause of the fall in prices. The crash managed to wipe almost 40 billion dollars off investors’ pockets. However, it stands at a mere $979 million at the time of writing. Last month, at its all-time high, the market cap of LUNA stood at a whopping $40 Billion. Soon after, the price of LUNA fell by 99% multiple times, eventually landing at an all-time low of $0.000000999967, almost zero. The overall crypto market bleeding supplemented the already plummeting price of LUNA, and it fell below a dollar after its ATH of $119 last month. This behavior was parallel across most cryptocurrencies, and the crypto markets were a host of red candles. By 12th May, the price reached a 10-month low of $26,350.49. Due to this, the price of Bitcoin witnessed a sudden fall as well. Sidenote – Terraform foundation was among the top 10 holders of BTC. To stabilize the UST peg, Terraform foundation liquidated all of its 40k Bitcoin holdings. As a result, the price of both UST and LUNA started showing a downward trend. While the initial dump was pretty significant, it was complemented by multiple dumps of a considerable magnitude as the news took Twitter by storm. This exact conversion method can also be applied to the coins in reverse.Ĭonvert UST -> Mint LUNA -> UST gets burnt -> Price of UST goes upĬonvert LUNA -> Mint UST -> LUNA gets burnt -> Price of LUNA goes upĪ massive $285 million UST dump initiated a domino effect of shorting the asset. ![]() These LUNA are then burnt, and consequently, the price of LUNA goes slightly up due to the supply contraction. So if you wish to buy TerraUST, you’ll have to mint them by paying a going rate through LUNA. What Happened to Terra LUNAĪs mentioned earlier, for TerraUST to maintain its peg to $1, it must be minted or burnt. Under this mechanism, the stable coin maintains its price. The opposite is done when the price crosses $1. A certain amount of LUNA is burnt every time the price of UST falls under $1 so the price can recover. Terra UST does not rely on a stored asset to derive its value, but instead generates it by following a set of rules. The UST token is linked to the US dollar, as most stable coins are linked to one fiat or the other. TerraUST is an algorithmic stable coin that works following LUNA to maintain its price of $1. LUNA is the native token of the Terra blockchain. So, why exactly did LUNA crash? Follow along as we explore the LUNA crash in detail. Consequently, many exchanges delisted LUNA and UST to prevent traders from making losses by taking risky positions. As a result, the Terra validators chose to halt the network, stopping the block production. It lost its peg to $1 and came crashing down to eventually land at less than a cent price. The crash resulted from the ill performance of the algorithmic stable coin, UST. The crash was of a huge magnitude and managed to wipe more than $40 Billion of investors’ wealth in a matter of days. LUNA, the Terra native token, crashed to almost zero. This May, the world of crypto witnessed one of its biggest crashes ever. ![]() Join Our Telegram channel to stay up to date on breaking news coverage
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