Update On Luna! And When Will Luna Recover?
Luna is showing no signs of recovery following its dramatic crash that wiped billions from investors’ wallets.
The coin, which was valued at over $100 little over a month ago, is now worth just a fraction of a cent. It is trading at $0.00015 as of Friday morning.
The crash had a knock-on effect on Bitcoin and other major cryptocurrencies, and the market is yet to recover
What Is luna?
Luna (LUNA) and TerraUSD (UST) are two native tokens of the Terra network, a blockchain-based project developed by Terra Labs in South Korea.
The Terra blockchain is built on Cosmos SDK; a framework that allows developers to create custom blockchains and build their own decentralized applications on top of Terra for various use cases.
Why Did Luna Crash?
Essentially, the crash happened because the Terra network stopped working as it should.
UST lost its peg to the US dollar and its value began to fall. There is no official word yet as to why this happened.
This led to the algorithm issuing more and more Luna coins to try and recorrect. However, it went into overdrive, and this caused serious problems.
Can Luna recover?
The only way for Luna’s value to recover to anywhere close to its former price, would be to burn large amounts of the supply, to bring it back down to pre-crash levels.
Terra has said this is part of the recovery plan, but it may not even be possible.
Terraform Labs founder and CEO Do Kwon said: “What we should look to preserve now is the community and developers that make Terra’s blockspace valuable – I’m sure our community will form consensus around the best path forward for itself, and find a way to rise again.”