Luna Crypto is a subsister coin of the controversially stable coin Terra USD, UST. For the past few days, UST has been in the spotlight for its controversial stability maintaining method. UST uses complex coding to maintain its value of around the $1 mark by using the minting and burning method. A Terra coin is created by destroying some of the Luna currencies.
What was the reason behind all?
The Terra Network-operated stable coin UST, Luna, and Anchor were interlinked. The issues started on May 9 when Terra’s algorithmic stable coin Terra USD (UST) started falling due to talk of some big players dumping the digital asset. This led to a run on Luna and once the UST was debugged from the dollar, the coins crashed.
On 13th May, the Terra network was halted by validators as its supply increased exponentially. On the 12th too, the network was stopped to prevent governance attacks. After the crash, Major Indian crypto platforms CoinDCX, Coinswitch Kuber, and Wazir X delisted stable coins Terra UST and Luna from the Terra Network.
There is good news too…
Meanwhile, Bitcoin and other cryptocurrencies bounced back on May 13 after recording losses over the week. Bitcoin had crossed $30,000 after touching $26,000 on May 12. Ethereum was 8% up, Binance Coin had gained more than 11% and Solana had risen 16%. The total market cap of cryptos was at $1.31 trillion on the 13th.
Do Kwon, founder of Terraform Labs, pitched a revival plan for Luna and UST on Terra Forum. His plan revolves around restarting the Terra blockchain, by distributing network ownership entirely to UST and Luna holders through 1 Billion new tokens.
What about the regulations?
After the fall of Terra and Luna, questions have been raised again about the regulation of digital currencies. As many crypto investors are facing a huge loss due to the crash in valuation. A huge number of Indian investors also carry Luna in their portfolios. To avoid this type of disaster, a joint body to coordinate cryptocurrency rules could be launched considerably within the next year, Ashley Alder, Chairman of the International Organization of Securities Commissions (IOSCO), said recently.
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