The circulating supply of Terra (LUNA) was inflated, which several traders who rushed to buy LUNA cryptocurrencies were unaware of.
The Terraform Labs team was forced to cease the Terra blockchain because to the severe inflation, but the harm had already been done: during the crash, the LUNA supply of coins in circulation increased by almost 18,000 times, from roughly 350 million to 6.5 trillion.
What is Luna?
The Terra network’s native tokens, Luna and TerraUSD (UST), are both blockchain-based projects developed by Terra Labs in South Korea.
“The Terra blockchain is built on Cosmos SDK,” according to CoinDesk , “a framework that allows developers to create custom blockchains and build their own decentralized applications on top of Terra for a variety of use cases.”
“There are currently over 100 domestically produced projects in the Terra ecosystem.” Non-fungible token (NFT) collections, decentralized finance (DeFi) platforms, and Web 3 apps are among them.”
Terra’s goal is to become a peer-to-peer electronic cash system. It intends to accomplish so by employing “stablecoins,” which are cryptocurrencies that are tethered to a real-world currency.
Luna Crypto What Happened?
According to the law of supply and demand, if there are 18570x more of something, it loses value per unit. The Winklevoss twins, millionaire founders of Gemini Exchange, have dubbed cryptocurrency “digital Gold” because it is no longer rare or scarce.
LUNA dropped over 99 percent from its all-time high of $119 to under a dollar, then 99 percent again to one cent, then 99 percent twice more to its current 2022 low of $0.00000112 against Binance USD (BUSD), one of the few trading pairs still available at the time – many crypto exchanges delisted it.
In the face of global inflation, investors appear to be migrating away from bitcoin and into less hazardous options. Read also: What exactly are NFTs and how do they work?
Coinbase’s stock plunged 15.6 percent overnight on Tuesday after the company reported financial losses of $430 million (£348 million), significantly more than experts expected.
Coinbase mentioned a “pattern of both lower crypto asset values and volatility that began in late 2021,” but was quick to add that these conditions are not expected to last.
Will the LUNA Cryptocurrency Survive? Analysts are stuck.
Investors may be throwing their hands in the air because the LUNA cryptocurrency is now selling at a fraction of a cent. Is this strategy to save the Terra network viable?
Many people have reservations. The majority of online discussion regarding the network appears to be negative, with many investors already declaring the initiative dead. Even with its extremely cheap cost, Trevor Jennewine of The Motley Fool advises investors to avoid LUNA right now. Price forecasting websites such as CoinPriceForecast and DigitalCoinPrice see little prospects for the network’s expansion. For LUNA, the two sites forecast a price of 6 cents and less than 1 cent at the end of the year. Read also: Terra Luna Crypto Crash: Why Is LUNA Price Falling?
Others remain optimistic about the network’s future. InvestingCube, a cryptocurrency analysis website, believes that a LUNA crypto price rebound is possible. According to the research, a LUNA gain might be catalyzed by UST rebounding to $1, allowing it to regain its footing. With its 12-month LUNA estimate, price prediction firm WalletInvestor remains extremely positive. By May 2023, it anticipates the coin to be worth $151. Gov Capital, on the other hand, predicts a $108 price for the coin in the same time frame.