In mid-May, the luna cryptocurrency on the Terra Luna blockchain had totally collapsed. Renamed lunc some time later, the latter is experiencing a resurgence of interest…
The cryptocurrency ecosystem sometimes looks irrational. The price of the cryptocurrency lunc (formerly luna) is experiencing a meteoric rise, after experiencing a descent into hell.
As a reminder, in mid-May, the price of the Luna cryptocurrency fell by 99.97%, falling to less than $0.00005, in the face of the destabilization of the stablecoin terra usd (ust) of the Terra blockchain. In the space of just a few days, this cryptocurrency which was in the top 20 cryptocurrencies in terms of capitalization, with the equivalent of $40 billion in circulation, fell below $355 million in capitalization.
Following the collapse of this cryptocurrency (which resulted in considerable losses for many holders of this cryptocurrency), an ecosystem recovery plan proposed by the founder of the blockchain Terra Do Know has been accepted by the community . This plan created two separate blockchains: the new Terra blockchain and its luna token (luna 2.0) and the old Terra blockchain, dubbed Terra Classic and its lunc token (formerly luna).
A jump of 330%
Four months after the collapse of luna, its price is starting to rise again. Indeed, according to Coinmarketcap data, its course has been rising since the end of August. For example, the cryptocurrency was trading on August 24 at $0.000102 and today it is trading at $0.0004388, thus jumping 330% in just a few weeks. Similarly, its level of capitalization was multiplied by 9 between May and September, rising from 355 million to more than 2.7 billion on Tuesday.
Among the tracks that would explain this rise, we can mention the return of “staking” on the Terra Classic blockchain since August 26 due to the transition to a new version of the blockchain, as announced by the Lunc DAO organization which belongs to the Terra Classic blockchain.
As a reminder, staking is an operation which consists, for a cryptocurrency holder, in immobilizing part of what he owns in this cryptocurrency in a specific place (on a trading platform or a blockchain), in principle to secure exchanges by helping those who validate transactions. By immobilizing their cryptocurrencies, a user is rewarded in cryptocurrencies at often attractive rates.
According to the specialized media Cryptocast, on the day of the introduction of staking, 182 billion luncs had been deposited on the blockchain, representing 2.6% of the supply of tokens in circulation (more than 6,900 billion luncs). This Tuesday, according to data collected by the Twitter account “Lunc Staking“, 529 billion tokens are staked on the blockchain, or just over 8% of the token supply.
“In my opinion, many users do not necessarily understand all the subtleties and what causes an increase in the interest rate to these levels. Moreover, it is this type of unsustainable return that has been fatal to the ‘Terra ecosystem’, explains to BFM Crypto Sébastien Leguell, founder of the specialized media Around the Block.
In addition, another event in the line of sight could be at the origin of such a rise: that of a “burn” of this token (that is to say the destruction of part of the tokens in circulation ) scheduled around September 12.
Indeed, to date, more than 6,900 billion tokens are in circulation and “the announced objective would be to lower this total to less than 100 billion tokens initially”, specifies the specialized media Be(in)crypto.
“It is above all an increase based on speculation thanks to the effect of the figures which promise substantial interest to users. The effect of the announcement of the burn reinforces this speculation even more in the eyes of users. I think there’s a lot of marketing around that, knowing that the majority of protocols that were used in the past have deserted the ecosystem”, considers Sébastien Leguell.
Despite the rebound of this cryptocurrency, let’s take a step back. Today, the lunc ranks 205th in the Coinmarketcap ranking in terms of its capitalization.
As a reminder, the Luna cryptocurrency crashed amid turbulence in the cryptocurrency market last May. Its all-time high dates back to April 5, 2022 when the cryptocurrency traded at $119, while its all-time low dates back to May 13 when it fell as low as $0.00001675.
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Why the lunc (ex luna) cryptocurrency is making an unlikely comeback
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