Terra LUNA cryptocurrency

One of the most promising cryptocurrencies has cratered. The cryptocurrency crisis has gone from bad to worse as LUNA, the native token of the Terra (LUNA - ...

The cryptocurrency industry has a track record of recovering from its declines. But on May 9, TerraUSD lost its peg to the dollar after a series of major withdrawals, and its arbitrage mechanism failed to solve the problem. Instead of supporting TerraUSD, LUNA was overwhelmed by the volatility, sending its market cap down 99% to just over $230 million at the time of writing. It comprises two types of assets: Terra, its portfolio of stablecoins, and LUNA, the tradeable token designed to absorb the volatility of the stablecoins. Terra is a blockchain designed to facilitate stablecoins, which are cryptocurrencies pegged to real-world currencies like the U.S. dollar or the euro. This stunning collapse has dragged down the entire market -- which is now down 41% year to date to $1.3 trillion.

A hard fork requires all nodes or users to upgrade to the latest version of the protocol software. Terraform Labs plans to put forth a new governance ...

About 5 percent will go to essential developers, while 70 percent will be given to LUNC and UST holders at various snapshots of events in May. The tokens will be subject to vesting conditions. Terraform Labs (TFL) will also remove its wallet from the whitelist for the airdrop to make Terra a fully community-owned ecosystem, similar to platforms like Ethereum in some ways, Business Insider reported. The move comes after market volatility and inherent protocol design flaws wiped out a majority of Terra Luna’s market cap last week.

Traders sold the tokens even as founder Do Kwon proposed a separate chain to make up for last week's implosion of UST.

What happened to Terra (LUNA), which some traders that rushed to buy LUNA crypto coins didn't know, was inflation of the circulating supply.

Dissent in the ranks at Terra, a lack of consensus and now even resignations will likely not be bullish for the price. That would be a just over 10x increase from the LUNA price today. If the Terra supply isn’t burned, even recovering to $1 is in a sense mathematically impossible. It would flip Ethereum, which is also unlikely as so much of DeFi runs on ETH, at just under four cents – $0.04. Is Luna recoverable? Normally a crypto crash, whether in Bitcoin or altcoins, is only a result of panic selling, shorting, stop losses being hit, and a liquidation cascade of long positions forced to sell. Then vice versa if it lost its peg and became worth more than $1 – UST could be redeemed for LUNA, to lower the price of UST. The situation accelerated with UST losing 90% of its value and LUNA crashing even worse. The value really only crashes on exchange platforms – where people panic and long term investors buy the blood. The way the stablecoins were kept stable, pegged 1:1 to the dollar or another local currency was by making it possible to swap units of the stable coin, for a native token that wasn’t stable. In the words of Goldman Sachs, DeFi is ‘easier to access for underbanked populations and provides faster settlements for users’. It’s no longer as rare or scarce – crypto has been referred to as digital Gold by the Winklevoss twins, billionaire founders of Gemini Exchange. This mint and burn effect in this dual-token system was managed by an algorithm, happening automatically.

PORTLAND, Oregon (BLOOMBERG) - The crypto world has been riveted by the rapid collapse of the TerraUSD stablecoin, or UST. But its implosion may bring about ...

UST was designed to use algorithms and trader incentives in relationship with Luna to keep a one-to-one peg with the United States dollar, but these mechanisms broke down as selling hit UST, triggering even deeper declines in Luna. If the loss of value appears to be permanent, only a few ideological fans remain - everyone else leaves. Essentially, a blockchain is a database that can host hundreds or thousands of applications and record related financial transactions. And investors often receive a blockchain's native token or a related coin in exchange for their financial support. Scores of smaller blockchains have turned into the walking dead before, with their coins trading for less than US$1 and only a sprinkling of users - victims of poor design, conflicts among developers or hacks. They still have a smattering of loyal fans, many of whom dream that the networks will one day come back and their coins' values will skyrocket, making them rich.

Stablecoins are used by crypto traders as safe havens for when markets in DeFi (decentralized finance) get choppy: instead of converting their more volatile ...

He then used his position of power to defend his coin in the same way that the Federal Reserve might, in turn crushing the entire market. Much of the promise of crypto lies in its decentralized nature: that its value doesn’t derive from manipulable controlling authority like a bank or a government, but rather sleekly-designed code and network effects. We see this as a computing paradigm shift that is bigger than the ebb and flow of the short term price of Bitcoin. We are doubling down, specifically in infrastructure, DeFi and emerging use cases,” they wrote. “Some of the [firms] made a lot of money off this, and I think they should compensate those who have lost.” Over the last week, many leaders in the crypto community have scrambled to distance UST from other types of stablecoins, arguing that reserve-backed stablecoins are comparatively secure and should be allowed to continue to flourish with minimal regulation. “And those have had runs and have been bailed out.” (The economics journalist Jacob Goldstein made the same comparison in TIME’s Future of Money issue in October.) The rest of the crypto ecosystem needs to be open to working with regulators such that we can deter these types of situations from happening in the future,” MacPherson says. Many worry that Terra’s crash is the first domino precipitating a long-foretold “crypto winter,” in which mainstream investors lose interest and values remain low for months.“ I suspect some cryptocurrencies will be worthless and that capital investment in the space will slow to a crawl as investors nurse their losses, much as we saw in the Internet bubble,” Bloomberg’s Edward Harrison wrote. Their activity caused the linked currency Luna to also crash in what is known as a “death spiral.” As of now, UST is worth 12 cents, and Luna is worth fractions of a penny after being worth as much as $116 in April. The life savings of many Terra and Luna investors vanished in a matter of days. They present the same kinds of risks that we have known for centuries in connection with bank runs.” The crash bankrupted many investors and pulled down the entire crypto market with it: over $400 billion in value was wiped out in terms of crypto market capitalization.

Binance's Investment in Terra (LUNA) was once worth $1.6 billion, but as of 11am on May 17, it is worth approximately $3,000. Binance invested in LUNA four ...

The ultimate goal of Terra is to be a community-owned Blockchain. New Inflation Rate: In the revival plan, Do Kwon said that the existing revenue streams won’t be sufficient to cover the cost of security without increasing swap fees. This new plan essentially makes Terra a community-owned crypto Blockchain, more like a decentralised autonomous organisation (DAO). But there are several key risks to watch out for, since most of these measures will take some time to actually materialise. The entire list of the other essential Terra tokens can be seen here. In a blogpost, Do Kwon outlined several measures in order to save the Terra (LUNA) Blockchain ecosystem. Binance’s Investment in Terra (LUNA) was once worth $1.6 billion, but as of 11am on May 17, it is worth approximately $3,000.