What is Terra LUNA? What You Didn’t Know About Luna
May 20, 2022
After the price crash of LUNA and UST was named the biggest crypto boom in recent history, the number of people wondering about the futures regarding Terra Luna continues to increase.
In this article, there is Terra Luna, which is at the top of the agenda and attracts the attention of millions of investors.
The Terra LUNA coin fell by almost one percent from $99 in April 2022 and came into the limelight as it instilled fear into the crypto market. Its rapid decline and the many subsequent claims placed it in the first place.
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What is Luna Coin?
In 2018, Terraform Labs and its co-founders Do Kwon and Daniel Shin launched the Terra blockchain, which powers a decentralized finance (DeFi) ecosystem and creates algorithmic stablecoins. Stablecoins, cryptocurrencies held steady against reserve assets such as the US dollar, are often used in DeFi applications such as lending and borrowing.
“Terra is popular with the cool kids in crypto right now. People love the team behind Terra and they love all the various apps that are currently built on it.”
We’ve been getting good news about Luna for a while now. It was one of the most popular cryptocurrencies, especially in 2021. However, this decline in 2022 and the destruction it brought after it surprised everyone.
Terra uses a proof-of-stake approach, with validators checking transactions based on the amount of coins they hold. According to supporters of the Proof-of-Stake model, it is less energy intensive and has a lower environmental impact than other systems.
Owners of Luna are given management rights and voting rights for the protocol. Because Luna is the local symbol of Terra. Luna is also a regulator for the Terra ecosystem.
LUNA is the native token for Terra, a blockchain developed by Korean firm Terraform Labs. A total of $32 million was raised to fund this development through the private sale of LUNA coins. Investments came from central sources such as Binance, Huobi, and OKEx.
Hougan Warns About Terra Luna
Financial experts generally recommend not investing more than you can afford to lose in all cryptocurrencies as they are volatile. Before investing in digital currency, consider and understand the potential for large price fluctuations.
The riskier case, according to Hougan, is that investors may suffer if Terra fails to keep stablecoins stable. Luna serves as a kind of volatility reduction mechanism for Terra’s stablecoins. Therefore, its performance may reflect that of stablecoins.
Whatever the case, Terra’s stablecoins have performed well so far, including the Dollar-pegged UST. It’s impossible to know what the future will hold for any commodity or whether it can withstand significant price fluctuations or a bear market.
Why did Luna fall?
Luna collapsed as Terra held steady against the dollar amid concerns about the Fed’s upcoming rate hike.
This caused its price to bottom out.
Leading crypto exchange Binance temporarily suspended withdrawals on Luna on Wednesday, and on Thursday night, the Terra blockchain was officially suspended.
Terra said she took action to “prevent management attacks.”
The Terra blockchain has officially halted at block 7607789.
Terra Validators have halted the network to come up with a plan to reconstitute it.
The rapid decline in Luna was above expectations. Many began to say that Do Kwon’s explanations were not satisfactory and Terra would be removed from the market.
The coin’s breakdown comes in the midst of an overall slump for cryptographic money, with many coins losing a fourth of their worth in the beyond 24 hours.
Financial backers have all the earmarks of being getting away from cryptographic money and towards safer interests despite worldwide expansion.
Shares in Coinbase, the biggest crypto trade in the US, dropped 15.6 percent short-term on Tuesday after it posted overall deficits of $430m (£348m), far more awful than examiners were anticipating.
Coinbase refered to a “pattern of both lower crypto resource costs and instability that started in late 2021”, however rushed to call attention to that it doesn’t anticipate that these circumstances should be “long-lasting”.
The news has brought up issues about whether the market has arrived at a normal chilling period – recently named a “crypto winter” – or a more long-lasting chill, maybe a “crypto ice age”.
Simon Peters, crypto market examiner at exchanging stage eToro, said: “The worry now for cryptoasset financial backers is the point at which the slide will end.
“The market is trapped in the more extensive affliction of speculation showcases that are fighting to choose where confortable levels are following loan cost climbs intended to subdue taking off expansion around the Western world.”
Will Luna recuperate?
The coin can possibly recuperate, however at present things are incredibly dubious.
Do Kwon, pioneer behind Terra maker Terraform Labs, tweeted on Tuesday: “Near reporting a recuperation plan for $UST. Keep things under control.”
He added on Wednesday: “I comprehend the most recent 72 hours have been incredibly hard on every one of you – realize that I am made plans to work with all of you to climate this emergency, and we will construct right out of this.
“The Terra biological system is one of the most dynamic in the crypto business, with many enthusiastic groups building class characterizing applications inside… Terra’s re-visitation of structure will be an amazing sight.”
Contributing exhortation site Investing Cube has theorized there is a “great opportunity” the cryptographic money could recuperate.
Expert Kelvin Maina expressed: “For Luna to recuperate, they should resolve the issue and show plainly that such a drop won’t reoccur. As an expert, I hope to see a knock in Luna costs after UST is fixed back to the dollar. I additionally anticipate that the costs should begin recuperating after the Terra project shows that comparative issues won’t occur from now on.”
Individuals from Luna’s committed subreddit have been regretting their misfortunes on Reddit. A subreddit is an auxiliary string or class inside the Reddit site.
“I lost more than $450,000, I can’t pay the bank,” one composed, while others have referenced possibly losing their homes.
How unsafe is digital currency?
Individuals contribute notwithstanding the obvious danger ahead and cryptographic forms of money are not managed by British monetary specialists.
All crypto speculations are dangerous, however image coins like Shiba Inu are especially unpredictable, and you ought to be ready to lose all that you contribute.
The Financial Conduct Authority (FCA) cautioned in January: “Putting resources into cryptoassets, or speculations and loaning connected to them, for the most part implies facing exceptionally high challenges with financial backers’ cash.
“In the event that purchasers put resources into these kinds of item, they ought to be ready to lose all their cash.”
Susannah Streeter, senior venture and markets examiner at Hargreaves Lansdown recently made sense of the dangers for I.
She said: “On top of being incredibly unpredictable, most cryptographic forms of money are unregulated, which adds one more layer of vulnerability as well as implies that financial backers have practically zero security against extortion.”
Why Is Terra Different?
Terra aims to differentiate itself from the rest with the use of stablecoins pegged to fiat currencies, stating that it combines the unlimited benefits of cryptocurrencies with the price stability of fiat currencies. It maintains a one-to-one fixed price feature thanks to an algorithm that automatically adjusts the supply of fixed-value cryptocurrencies according to its demand. To achieve this, LUNA achieves by encouraging its holders to trade LUNA and fixed-value cryptocurrencies at profitable exchange rates to expand or curb the supply of fixed-value cryptocurrencies to meet demand as needed.
Terra has established many partnerships with payment platforms, particularly in the Asia Pacific region. In July 2019, Terra announced a partnership with Chai, a mobile payment application based in South Korea, where purchases made on e-commerce platforms using the application will be processed over the Terra blockchain network. Each transaction incurs an (average) 2-3 percent fee charged to the business owner.
How Many Terra (LUNA) Coins Are There in the Market?
Terra has a supply of 1 billion tokens. If this number is exceeded, the LUNA is burned until the supply drops back to equilibrium. New LUNA tokens are generated as needed to maintain the price of Terra stablecoins through the protocol’s algorithm.
LUNA was initially available for purchase in a special token sale for early investors, including investment branches of major exchanges such as Binance, OKEx, and Huobi. The sale ended in August 2018, and Terra raised $32 million as a result. Of the 385,245,974 LUNAs produced for sale, 10 percent is for Terraform Labs, 20 percent for employees and project contributors, 20 percent for Terra Alliance, 20 percent for price stability reserves, and 26 percent for projects. for backers and 4 percent for initial liquidity.
Terra vote gets backlash from LUNA investors
More than 148 million votes were registered in favor of the proposal, nearly 24 hours after TerraForm Labs launched a proposal that allowed the community to decide whether to create a new chain without the algorithmic stablecoin UST. According to Terra Station data, 77.99 percent of the 148.57 million games registered so far support the creation of a new Terra chain. However, “no” votes represent 20.28 percent of the total votes in the poll.
With the results so far, it can be said that the vast majority of members of the Terra community support the idea that the team should create a new chain without the algorithmic stablecoin UST. However, opinions on various social media platforms show the opposite.
Many Terra investors argue that the vote was rigged by the TerraForm Labs team led by company founder and CEO Do Kwon. Some users claimed that more than 10 million votes were registered for the “yes” option just seconds after the voting started, as explained by the Terra team. Based on this, they argued that the vote was organized to support the team’s goal of creating a new chain and LUNA coins.
Other users, who also reacted to the Terra team for allegedly manipulating the voting, stated that they wanted the old LUNA tokens to be burned to increase their value, instead of creating a new chain with the new LUNA tokens. “We don’t want new chains, we want Luna burned, ….. Don’t be a scammer – FAKE votes, looks like fake voting,” one user wrote. Another user expressed his concerns: “LUNA DAO has some questionable behavior. Voting is held in favor of the developers! WE NEED BURNING!”
Burn Terra Luna
The value of Luna, which has reached a single supply with its unlimited printing, continues to decrease rapidly. Many Luna supporters state that this situation will only be stopped by the “Burn” process.
However, Do Kwon and his team avoid responding to these requests. Many investors know that in order for Luna to gain value again, some of it needs to be taken off the market. Twitter and reddit users, who say that the only solution for Luna Coin, which has reached the high supply, is burning, are angry that they have not yet received the answer they want.
Founder Announces A Recovery Plan For LUNA
Last week, the Luna Foundation Guard (LFG) voted for the use of $1.5 billion Bitcoin when the UST stabilization broke. Taking its first big hit, Bitcoin quickly hit all crypto markets with $1.5 billion in sales. However, on Monday, the UST continued to fall, priced at $0.0873 at the time of creation.
Terra’s move failed. Afterwards, the question of where the $ 3.5 billion BTC went, confused them.
According to the statement of blockchain platform Elliptic, 750 million worth of BTC was sent to another address after LFG announced the $ 1.5 billion loan on Monday. Afterwards, $930 million worth of BTC was moved to a different address and from there to the Gemini exchange. It is among the rumors that a total of $ 1.6 billion worth of BTC has been moved here.
If these assets are held, some loss may be covered. The UST and LUNA collapse destroyed trust in Terra co-founder Do Kwon. As a result, victims and investors are questioning the transparency of the actions taken last week. If these assets were sold, at what levels were they exchanged? If the sale did happen, why was there the need to print trillions of LUNAs?
There are also different opinions about AVAX reserves
There are also different opinions about AVAX reserves. The prevailing view is that there remains a total of $52 million in AVAX. Another consideration says that the $100 million AVAX received is already locked and cannot be unlocked anytime soon.
Statement by Do Kwon
Binance CEO CZ today called on Terra management to be transparent with the community, while Terra co-founder Do Kwon made important statements. Announcing a recovery plan, DW proposed to fork Terra as a new Blockchain network, separating it from TerraUSD, the blockchain network’s stablecoin.
Provided key details on LUNA deployment
The proposed plan is to rename the LUNAs currently in circulation and continue as LUNA Classic(LUNC). The tokens to be printed on the new chain start with the name LUNA. Making a statement about the new LUNA distribution, DW said that these tokens will be distributed by airdrop to the owners of existing LUNAs (the name will be changed to LUNC), stakers, UST holders and developers. Another important detail proposed in the plan is the exclusion of Terraform Labs’ wallet from the airdrop. Thus, Terra will be a completely community-owned blockchain.