On Wednesday (March 9), OKX CEO Jay Hao stated that in the previous 24 hours, $LUNA, which is the native staking and governance token of Terra procedure, had the 2nd greatest trading volume on his exchange.
What Is Terra ($ LUNA)?
The authorities Terra documents has this to state about the Terra Protocol:
“The Terra protocol is the leading decentralized and open-source public blockchain protocol for algorithmic stablecoins. Using a combination of open market arbitrage incentives and decentralized Oracle voting, the Terra protocol creates stablecoins that consistently track the price of any fiat currency.
“Users can spend, save, trade, or exchange Terra stablecoins instantly, all on the Terra blockchain. Luna provides its holders with staking rewards and governance power. The Terra ecosystem is a quickly expanding network of decentralized applications, creating a stable demand for Terra and increasing the price of Luna.“
As for the protocol’s two main tokens, it says:
- Terra: “Stablecoins that track the price of fiat currencies. Users mint new Terra by burning Luna. Stablecoins are named for their fiat counterparts. For example, the base Terra stablecoin tracks the price of the IMF’s SDR, named TerraSDR, or SDT. Other stablecoin denominations include TerraUSD or UST, and TerraKRW or KRT. All Terra denominations exist in the same pool.“
- Luna: “The Terra protocol’s native staking token that absorbs the price volatility of Terra. Luna is used for governance and in mining. Users stake Luna to validators who record and verify transactions on the blockchain in exchange for rewards from transaction fees. The more Terra is used, the more Luna is worth.“
And this is Binance Academy’s brief explanation of what Terra is:
“Terra is a blockchain network built using Cosmos SDK specializing in stablecoin creation. Rather than use fiat or over-collateralized crypto as reserves, each Terra stablecoin is convertible into the network’s native token, LUNA. LUNA allows holders to pay network fees, participate in governance, stake in the Tendermint Delegated Proof of Stake consensus mechanism, and peg stablecoins.
“To peg a stablecoin like TerraUSD (UST), a USD value of LUNA is convertible at a 1:1 ratio with UST tokens. If UST’s price is, for example, at $0.98, arbitrageurs swap 1 UST for $1 of USD and make 2 cents. This mechanism increases UST demand and also reduces its supply as the UST is burned. The stablecoin then returns to its peg.
“When UST is above $1, say at $1.02, arbitrageurs convert $1 of LUNA into 1 UST and make 2 cents. The supply of UST increases, and demand for UST also decreases, bringing the price back to peg. Apart from reducing stablecoin volatility, validators and delegators stake LUNA for rewards. These two actors play an essential part in keeping the network secure and confirming transactions.
“You can purchase LUNA via Binance and then store it, stake it, and participate in governance with Terra Station, the official wallet and dashboard for the Terra blockchain network.“
$LUNA Price Analysis
According to data by TradingVolume, on crypto exchange Binance, currently (as of 9:39 a.m. UTC on March 9), $LUNA is trading around $97.05, up 19.02% in the past 24-hour period.
And $LUNA’s price action is even more impressive when you look at its performance vs USD in the past one-month period:
This price increase was accompanied by heavy volume. For example, On crypto exchange OKX, $LUNA’s trading volume was second only to $BTC:
Earlier today, crypto analyst Ali Martinez offered this technical analysis of $LUNA:
What $LUNA Investors Are Saying
Earlier today, $LUNA HODLer pointed out that yesterday (March 8) 1.8 million $LUNA tokens were burned:
And on Monday (March 7), another HODLer explained the significance of the current very high burn rate:
Over the past 3-wks, $LUNA burn has averaged 1.4-m circulating supply per day. Held steady, that level of $UST mint / $LUNA burn would completely drain liquid and non-liquid circulating supply by late-November. LUNA is going to get real scarce, real fast. pic.twitter.com/zG9o1oHZB6
— Murray Rudd (@crypto_rudd) March 7, 2022
Yesterday, crypto analyst and investor “Wold of DeFi” spoke about what an excellent safe house property $LUNA has actually remained in the existing bearishness:
$ UST simply reached a 14B market cap, $LUNA keeps being burned, $LUNA/ $BTC set at all time high levels, $LUNA/ $UST back up after a brief retrace.
Can all of us simply concur that $LUNA is immune for bearishness?
— Wolf of DeFi (@wolf_of_defi) March 8, 2022
He likewise discussed the upcoming supply shock:
He likewise published a detailed thread on how to finest create passive earnings from $LUNA:
1./ $LUNA is among the very best yielding possessions. I truthfully do not care about the cost. I take benefit from the yield I make. Not from offering $LUNA. Partially intensifying, partly cashing. $LUNA is my life time passive earnings.
A thread on how to make $LUNA yield
— Wolf of DeFi (@wolf_of_defi) March 8, 2022
Perhaps the $LUNA financier who finest used his appreciation for $LUNA and $UST the other day was “Argonauts”:
And lastly, on February 27, Miles Deutscher, who is the host of the You Tube channel “Crypto Banter“, explained why he loves $LUNA’s fundamentals:
You’ll struggle to find better fundamentals in crypto.
— Miles Deutscher (@milesdeutscher) February 27, 2022
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.
Featured Image by “rkarkowski” by means of Pixabay