The worldwide cryptocurrency market appears to be in rapid collapse, with the prices of numerous popular tokens hitting new lows. In the previous 48 hours, the list of top cryptos by market cap has changed dramatically.
Terra Luna Crypto Crash Today! Why Is LUNA Cryptocurrency Price Falling Ust Terrausd Depegging Reason Value
Terra (LUNA), which was formerly one of the top cryptos, has fallen to 59th place, losing over 96 percent of its value in the last seven days, currently at $0.04389 from $120. Its price has dropped by nearly 96 percent in the previous 24 hours alone.
In the previous seven days, Bitcoin has lost approximately 28% of its value. BTC was just $28,002 at the time of publication.
What Is Terra Luna, Exactly?
Terra is a blockchain system that uses stable coins backed by fiat currency to create price-stable global payment networks.
Terra, according to its white paper, combines the price stability and widespread adoption of fiat currencies with the censorship resistance of Bitcoin (BTC) to provide quick and low-cost transactions. Its lowest price drop was recorded at $0.40 in August 2020.
In April 2022, it reached an all-time high of $119.55, a 300x increase., with a market valuation of nearly $40 billion, it rose to sixth place
What Is Terra Blockchain All About?
It is a platform for creating fiat-pegged stable coins that power global payment systems with rapid and economical settlements, such as Alipay on the Blockchain.
Offers stable coins tied to the US dollar, South Korean won, Mongolian tugrik, the International Monetary Fund’s SDR reserve asset, and more.
In case something goes wrong, the company is said to be backed by $3.5 billion in Bitcoin reserves — one of the top 10 BTC holders.
What Exactly Is TerraUSD?
Tether is a stable coin that is tied to the US dollar (USDT). Staking UST on Anchor Protocol and other crypto platforms earned investors a 20% yearly income.
It fell from $1 to $0.30, with a market cap of $9.6 billion, it was once a top ten crypto asset. The cap of stable coins like USDT, USDC, and BUSD is higher.
What Is The Relationship Between Terra Luna And TerraUSD?
Terra (LUNA) and TerraUSD (UST) were launched by Terraform Labs, a South Korean company founded in 2018. Do Kwon, the CEO of Terra Labs, is at the center of the story.
The concept of creating an ‘algorithmic stable coin,’ in which LUNA is burned ‘to mint’ UST to keep it stable when it loses its 1:1 peg to the dollar, and vice versa, is distinct from how existing stable coins such as Tether (USDT) and USD Coin (USDC) work.
The Terra ecosystem’s success is based on the adoption of UST as a stable coin, hence the LUNA token and UST are mutually dependent.
LUNA invests in UST and is burned when UST demand grows. If UST is perceived as unstable, however, the value of LUNA may fall.
What Is Causing Terra Luna To Crash?
The TerraUSD algorithmic stable coin de-pegging fiasco caused the cryptocurrency, Terra Luna, to crash. TerraUSD, or $UST, is another Terraform Labs native.
No one knows why UST lost its peg, and Do Kwon has not provided an explanation to investors or the general public. According to some rumors, this was a coordinated attempt to exploit Terra and induce a Bitcoin meltdown, allowing ‘whales’ to buy in at a low price.
Terra Luna’s Return To Recovery
During the Terra Luna meltdown on Wednesday, Do Kwon, the creator of Terraform Labs, declared on Twitter that he has a recovery mechanism for the Terra coins that he will share soon.
Many people believe Terraform Labs is in contact with many investors in order to get the cryptocurrency back on track.