Mark Weaden
Terraform Labs’ Luna token has seen around a 60% jump in the past seven days
Recent changes to the Singapore-based Terra (LUNA) blockchain platform have improved the blockchain payment network and offer some exciting prospects for its decentralized applications. There have been over 11 million Luna tokens burned in the last couple of weeks, with more than a million burned every day.
The price of Luna token has soared to an all-time high of $67 and a market cap of $25.3 billion, surpassing the buoyant Shiba Inu (SHIBA) coin and reclaiming the 12th spot in the coin rankings in the last few days. Luna bettered the other major decentralized cryptocurrency Avalanche (AVAX), as its price moves closer to the ever-present Dogecoin.
Changes To Luna
The Terra protocol deploys algorithmic stablecoins pegged to the U.S. dollar that underpin Luna’s decentralized finance (DeFi) ecosystem. The release of Terraform’s Mirror Protocol offers digital tokens mirroring U.S. traded stocks. Also, the ecosystem boasts a growing number of DeFi apps, such as Anchor, Pylon and Kash.
Recent comments from the co-founder of crypto platform Nexo Antoni Trenchev stated that “Crypto is all about creating a buzz and there’s a lot of attention on the Terra ecosystem, be it for DeFi innovation, stablecoin products, a recent network upgrade or Luna staking,” “the latest shiny thing in the crypto space, following in the footsteps of other blockchains like Solana and Avalanche, all which have witnessed explosive gains in the past year.”
A new governance approval will see the network destroy (burn) about 88 million Luna from the community pool, swapping it for UST, the Terra networks’ stablecoin. There has been a staggering change in the value of USTs’ market value, rocketing from $2.9 billion on November 10th, to over $7.8 billion as of today.
We saw the Ethereum network changed its currency to make it deflationary early this year, burning coins to increase scarcity. Similarly to Ether, by reducing the supply combined with the popularity of staking, we have seen a reaction in the value of Luna. With governments discussing intentions to regulate stablecoins, the Terra network is well-positioned to benefit greatly from any regulatory changes.
Terraform Labs’ head of communications Brian Curran said “Luna’s price dynamics are mostly a function of the demand for UST, and by extension, the demand for using UST across various applications and blockchains.”
Curran’s comments make the rise in price clear; as the Luna network grows and is accessed more by users, the market value increases. Taking that into account, the Luna network is opening doors for cross-chain usage of UST, meaning other networks supporting UST will help the value of the Luna ecosystem to grow even more.
