LUNA Valuation Rises as Token Begins to Recover Loss
Terra (LUNA) makes a slight comeback after its market capitalization and price tanked weeks ago. But there is another problem with the transfer as inter-blockchain communication passed out without execution.
Terra Luna and UST have been on the receiving end of a rough market crash of late, according to trading data obtained from an exchange. LUNA’s price fell from over $100 down to less than $0.0002 while the UST stablecoin took a heavy hit that saw it de-pegged from the USD.
Now, Luna is gaining momentum. At the time of this writing, Luna’s market cap stands at around $1.3 billion. The price has recorded a 15% increase as the Terra ecosystem struggles to recover.
From the rubble, the LUNA market cap inched above the $1 billion mark amidst the cryptocurrency rout which has however stabilised. Trading data shows that price had fallen to a low of $0.00000099.
As the price of LUNA tanked to a low, market capitalisation had slumped significantly below $60 million, with investors converting the cryptocurrency to stablecoins. READ: Treasures Hunters See Slowdown in Naira Value of Cryptoassets
However, stronger than expected buying interest in the retail segment lifted the price upward sporadically. LUNA has gone up over 100% in price, from a low of $0.0001037 to a high of $0.0002159, data from Coinmarketcap.com shows.
Analysts said it is possible that LUNA could surge higher before the upcoming Terra 2.0 goes live on May 27, 2022, however its circulating supply is not helping matters.
After LUNA fell, many investors withdrew the token from different pools and dumped them in the market, which further contributed to its price crash. In just two weeks, LUNA’s circulating supply surged from 300 million tokens to nearly 7 trillion.
There are currently 6.53 trillion LUNA tokens in circulation at press time, which raised further doubt about the possibility that LUNA would hit $1 before the new Terra chain is born.
There is a fresh downside risk to the rising price of the token. Terra team is facing technical issues as Inter-Blockchain Communication passed but cannot be executed.
The notable recovery may result from the Terra blockchain’s recent efforts to revive the network after the shutdown that followed the crash. However, the revival process seems to be facing some hurdles.
A recent statement by Terra reveals that the proposal to revive the network has passed but the execution is facing issues.
The Team further said: “During $UST’s depeg, IBC channels were closed (but not disabled) as a stop-gap measure to prevent impermanent loss being incurred on $UST & $LUNA pools on @osmosiszone & other IBC DEXs. As a result, users were then unable to transfer these assets across IBC chains.”
Terra has acknowledged the technical issues facing the blockchain network and has assured the community that the team is working to find a solution and re-open the network to the community. The enabling of IBC would help to unlock the transfers of LUNA and UST between chains.
“We are aware of the issues associated with this proposal & are working on getting the IBC channels open for users as soon as possible.” Meanwhile, plans to shore up Luna’s price are still discussed. Terra founder Do Kwon has proposed the execution of a hard fork to create a new Luna chain with new tokens that will then be airdropped to affected holders.
The new chain will also not be linked to UST. While the community was initially opposed to this idea during the preliminary voting round, the amended proposal was passed by core stakeholders. As of press time, UST is trading at around $0.09. #LUNA Valuation Rises as Token Begins to Recover Loss