The crypto market has seen a lot of turmoil in the past few days as many have left the country to seek safety. The issues with LUNA sparked a significant sell-off as Terra’s native digital asset dropped 97% in value against the U.S. dollar in 24 hours. At 9:00 AM (ET), Terrausd was trading at $0.299/unit, 67% less than its $1 parity.
Terra’s Native Token LUNA Loses 97%, While UST Loses 67% in 24 Hours
The Terra blockchain ecosystem has been ravaged by the events that took place over the last few days, when the network’s algorithmic stablecoin terrausd (UST) started to lose its U.S. dollar peg. Do Kwon, the project founder and Luna Foundation Guard (LFG), explained that they were lending $1.5 million in bitcoin (BTC), and terrausd to protect the peg. The attempt was futile and UST fell to $0.66 per currency. However, UST managed to rise above $0.90 for the majority of Tuesday.
Tuesday evening saw UST plunge again. Since then, it has fallen back to $0.299 per Unit. The native token LUNA lost 97% over the last 24 hours, more than UST. LUNA traded between $0.810 and $33.93 for 24 hours. Do Kwon, Terra’s co-founder, said that she would stay positive and that there was a plan. addressed the publicOn Twitter
“Before anything else, the only path forward will be to absorb the stablecoin supply that wants to exit before UST can start to repeg,” Kwon said. “There is no way around it. There are several ways to help the supply absorber, the peg system. First, we endorse the community proposal 1164 to Increase basepool from 50M to 100M SDR *) Decrease PoolRecoveryBlock from 36 to 18 This will increase minting capacity from $293M to ~$1200M,” the Terra co-founder added.
Kwon said Terra might rebound after the crash and that Terra was still on track. “Terra’s return to form will be a sight to behold,” Kwon tweeted. Kwon added that Terra’s founder also said:
We’re here to stay. And we’re gonna keep making noise.
‘Worse Than Bitconnect’
In the context of many individuals losing moneySome of them losing everythingMany people were critical of the Terra founder’s response. Peter McCormack, podcast host asked Kwon “What % chance to you give it that the same won’t happen again?” Bitcoin supporter Hasu said the UST event was “worse than Bitconnect.” “At least Bitconnect didn’t masquerade as a stablecoin,” Hasu added. “When your ponzi targets people’s savings (not investment) portfolio, there is a special place in hell reserved for you.”
Apart from the criticisms, there have been many people trying to buy the dipBecause they are confident that a strong recovery will occur. But, price volatility is causing many to lose their faith in crypto trading. Also, influencers in crypto Twitter (CT). deleting tweetsThat discussUST, LUNA and a positive view of them. The crypto liquidity Genesis provided was also a positive. explained that the company has “no direct exposure to UST and LUNA.” Individuals are also claiming that the downfall of LUNA and UST was a “coordinated attack.” “Market manipulation at its finest,” one individual tweeted.
Terra fans have also been following bots on Twitter, and they have shared their observations with us. stated they are certain Terra’s issues were the result of a blatant attack. Strange sightings have occurred of Twitter bots repeating the exact same statements, which is not uncommon. here, here, here, herePlease see the following: here. LUNA/UST has not fallen to zero but people either believe Do Kwon, or are betting they will. UST traded at $0.504/unit by 10:45 a.m. ET
Sator Says Luna Foundation’s CEO, Do Kwon Might Still Have Bitcoin Reserves
Isla Perfito (CEO of Sator), a community-first Web3 engagement platform that provides content and social networking, suggested there could be an opportunity for the Luna Foundation Guard to still hold bitcoin. “People assume LFG already sold their BTC,” Perfito told Bitcoin.com News in a statement. “That’s why UST is pricing at .40 on the dollar. If they do have BTC their backing is stronger. Do Kwon needs to provide a snapshot of the balance in his BTC for UST. The CPI numbers came in higher than expected today.” The CEO of Sator added:
According to me, inflation is at its peak. Investors now wait for the stock market bottom. One UST can be converted into one LUNA and vice versa. This is why we observed the Luna crash — when they decided to not keep the peg, they were selling Luna coins. With that said, there’s a chance that they have reserves to save UST.
Alex Tapscott, the managing director of the digital asset group at Ninepoint Partners, explained to Bitcoin.com News on Wednesday that Terra’s issue is similar to a hedge fund exploding. “This is not unlike what happens when a large hedge fund ‘blows up’ and is forced to unwind its positions,” Tapscott explained in an email. “It becomes a price taker causing the assets its own to suffer (though often just temporarily).” Tapscott continued:
Bitcoin and cryptocurrency will continue to be a long-term thesis. Bitcoin is the first digitally native money for the internet and crypto assets as a whole represent a 2nd era of the internet – an internet of value- that will continue to transform and rethink many industries.
Let us know your thoughts on the LUNA/UST fiasco, and what you believe has happened. Please comment below to let us know your thoughts on this topic.
Image creditShutterstock. Pixabay. Wiki Commons
DisclaimerThis information is provided for educational purposes only. It does not constitute an offer, solicitation, or recommendation of any company, products or services. Bitcoin.com doesn’t offer investment, tax or legal advice. This article does not contain any information, products, or advice that can be used to cause or alleged result in any kind of damage.