After enjoying strong gains in 2021, Crypto Luna fell below $1 in early May, spelling its demise and the collapse of a LINK crypto.
Now in the wake of Luna’s collapse, the coin’s founders plan to rebrand and relaunch the coin with the support of a majority of investors.
crypto market crash in May, and most major coins have suffered serious losses.
The sudden price drop of Luna came as a surprise as it is a stablecoin.
Stablecoins are backed by other assets in an effort to limit volatility.
Luna saw its first major spike last summer and climbed through the fall and winter.
The price of the coin peaked at $116 in early April, but as of May 26 it is down to $0.0001479 and is down 90% in the last 24 hours, According to CoinMarketCap,
Any cryptocurrency investor should know that this is not a guaranteed way to make money.
Their prices are highly volatile and can create large swings without notice, meaning you could lose all the cash you put in.
That’s why it’s important not to invest more than you can afford or invest in anything you don’t understand.
There is also little regulation for cryptocurrency firms, which means you are without protection if things go wrong.
What is Luna?
The luna, also known as the terra, is one of two major coins minted by Terra Labs, a South Korean company.
The Luna Foundation Guard, an organization that supports Luna’s price, has approximately 30,000 bitcoins in reserve to support the stablecoin. bitcoinist,
Another coin of Terra Labs, TeraUSD or UST was associated with Luna.
According to coindeskThe price of UST is “algorithmically stable” via smart contracts that include its sister coin.
The UST was valued at $1 through the process of destroying the Luna coins and minting the UST.
Theoretically, this process was believed to make the Luna more valuable as it becomes more scarce, and prevent the price of the UST from moving above its $1 benchmark.
However, the decline in UST price created a volatile market for the stablecoin.
“The slump in Luna is linked to a selloff following the issuance of millions of tokens to restore UST’s 1:1 peg,” Luzi Ann Xavier, market editor at Finder.com, told The Sun.
“Stablecoins were supposed to shield investors with dollars from their peg in the crypto market.
“When this peg broke, it shook investor confidence not only in stablecoins but in decentralized finance.”
Fall of UST and Terra 2.0. rise of
As a result of the drop in the price of Luna, UST fell in a similar way.
The coin suffered several setbacks after Luna was crated, and UST is now at $0.07709, less than three weeks after being at $1.
After the collapse of the Terra ecosystem, Terra founder Do Kwon placed the ultimate fate of Luna and UST in the hands of investors.
On May 25, Terra held a vote to revive the coin, and 65% of investors approved plans to relaunch Luna, but scrapped UST altogether.
As a result, a new Terra blockchain will be created, which will be branded as Luna, while the coin formerly known as Luna will be called Luna Classic.
Terra Labs plans to distribute new Luna coins to existing investors with 45% of new coins directed On pre-crash Luna and UST holders.
Another 25% of the newly minted coins will be given to investors who have entered the Terra ecosystem after the collapse.
The remaining 30% will be distributed around the Terra community.
Several trading platforms including FTX and Bitfinex have announced that they will support Luna 2.0.
Luna Price Prediction
Most cryptocurrency price predictions have not yet fully reacted to the news of Luna’s collapse and rebirth.
Some forecasts on Luna’s price are skewed because of this.
with that in mind, Wallet Investor predicts that Luna will recoup its losses and reach new highs before the end of the year.
PricePrediction.netOn the other hand, the price of Luna is expected to average $0.00035 next year and $0.00054 in 2024.
However these price predictions are never guaranteed, so you should always do further research and proper analysis.
Sun also broke down the price of Apcoin.
Read more how Elon Musk’s plan to buy Twitter affected the price dogecoin,
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