Monday, January 17

Luna: the cryptocurrency on everyone’s lips soars 11,000%

The price of the cryptocurrency luna skyrocketed in the last two weeks by 86 percent, bringing the gains in the year of this asset to around 11,000 percent, according to figures from Coingecko.

This upward escalation made Luna the 10th cryptocurrency by market capitalization, with a value of $ 27.3 billion.

Luna is the native cryptocurrency of Terraform Labs, a Singapore-based company that created the Terra blockchain.

It is a ‘blockchain’ that does not depend on other chains, such as Solana, who already ate bitcoin and ether in one sitting, so it works autonomously.

As explained in Bit2me, the jewels of Terra’s operation are its ability to execute smart contracts, deploy ‘stablecoins’ (stable coins) and decentralized application services (DeFi) that are integrated within Terra.

Luna follows in Solana’s footsteps

The Terra protocol implements stable currencies, that is, linked to fiat money, such as the dollar, to support the entire ecosystem of decentralized finance.

“There is a lot of attention paid to Terra’s ecosystem, whether it’s its decentralized finance innovations, stablecoin products, or its recent update,” he said. Anthoy Trenchev, firm expert Nexus.

It is “the latest brilliant story in the crypto space and follows in the footsteps of other blockchains such as Solana and Avalanche,” added this expert. All of these coins have seen explosive rises in the year.

Recently, Terra has squeezed the potential of its stablecoins with the deployment of various protocols that have made a lot of noise in the world of decentralized finance.

For example, the protocol Anchor, which is a liquidity market that allows the use of Terra’s stable currency, the UST, to make loans or exchanges.

Another protocol is the Mirror, although in this case its launch triggered an investigation by the SEC by offering digital tokens that mirror stocks traded on Wall Street.

Why is the moon cryptocurrency rising?

All these developments boosted the moon price, although the last bullish leg was due to different reasons.

The price “goes up because one of the largest venture capital firms in Asia, Chiron Partners, has launched a 50 million dollar ecosystem fund dubbed Chiron Terra Fund I (CTI),” he explained. Sergio Avila, IG analyst.

This investment vehicle is intended to support innovative projects that are emerging from Terra’s blockchain ecosystem.

The growth potential of the Terra ecosystem “is unlimited,” he said. Jack Cormack, Chief Operating Officer and Founding Partner of Chiron Partners.

The arrival of this fund was read in the market as an important support for Terraform Labs, which already raised 150 million dollars at the beginning of the year among other venture capital funds in the sector, such as Galaxy Digital, Pantera Capital The Blocktower Capital.

One of the specialties of Chiron Partners is investing in high-growth digital assets. A couple of months ago, the blockchain completed a major technology update and plans to launch 160 new projects.

Luna, a deflationary cryptocurrency

In addition to these news that boosted the moon price, the sources consulted highlighted the role of this asset as a deflationary currency.

A governance proposal for the network was recently approved that consists of destroying (or burning, in slang) around 88 million coins, exchanging them for SET, Terra’s stable currency.

Own SET it now has a market value of $ 7.7 billion, compared to $ 2.9 billion on November 10.

This practice of ‘burning’ coins is common among developers to increase scarcity. It is what turns the currency into a deflationary asset, like bitcoin or ether, pushing up on the price.

“The moon economy is designed to be deflationary. Over the last month we have seen 100 million tokens burn, removing them from supply forever,” he said Hayden Hughes, executive director of Alpha Impact.

“This reduction in supply combined with the popularity of luna has created a supply shock that has raised the value,” said this expert.