Terra is an algorithmic stablecoin platform for producing stablecoins modeled on currencies like the US dollar and the Euro.
It was among the most prominent stablecoin platforms until lately. From February to April of this year, the LUNA token appreciated by 233 %.
Terra Luna LUNA’s price graph, on the other side, has dropped over 99.9% of its value since the start of May. Only two weeks ago, coins worth more than $80 were valued at as little as a dime each.
As the value of cryptocurrencies begins to decline, there had been a rush on the Terra USD stablecoin. The stablecoin is based on supply and demand dynamics that can not keep up with demand to sustain 1 UST equal to $1. It was previously priced at less than $0.30 for one UST. The stock price of LUNA dropped due to investors’ lack of faith in Terra.
Is it possible for LUNA to make a return? It’s hard to recover a stablecoin’s reputation after it’s been damaged. For its recent emergence, it’s feasible that investors may reconsider investing in this stablecoin now that it’s become less popular. The Luna Foundation Guard, the non-profit which maintains LUNA’s reserves, has pledged to greatly enhance its reserves in order to avoid a repetition of this mishap.
Investing in LUNA has a high level of risk. However, post its May drop, the currency could recover and become a viable long-term investment.
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