This wants to be an important lesson for the reader, who glimpses stellar returns in the crypto sector without glimpsing these small problems that arise slowly and become a giant bubble, which bursting reaping users (the victims).
TERRA (luna) is a coin that has depopulated the ETH ecosystem, attracting consensus and substantial sums of money. The ecosystem worked until their stablecoin was introduced, which algorithm destroyed everything beautiful that was created. At the historical value of about $ 100, I decided to invest in it for the simple fact that I love the coins that generate returns through platform staking (even if the coin does not natively allow it). I have made several transactions totaling around $ 60 (nothing exaggerated, easily recoverable in case of total loss). I never thought that a single wrong operation by the team that built an empire would contribute to the destruction of a capital.
But it happened. The introduction of the stablecoin was well received, but after finding an error in the algorithm, someone thought of implementing a strategic plan to remove money from the ecosystem that LUNA had created up to that point. When an ecosystem decides to create a stablecoin, it should have a clear goal: a stablecoin MUST be stable. Everytime. Of course, it can undergo variations but its stability is the main key to not bringing down the entire ecosystem. Until now, in the crypto landscape, I have noticed that the main stablecoins do not have coins like AMPL in their portfolios, which react to the market in an algorithmic way by reducing or increasing the supply based on the price to have a perfect peg of $ 1. It may not be the best solution, but it has worked so far, as since I discovered this coin, in the bear market (when AMPL drops below $ 1) I buy and then resell when the peg becomes higher than 1.20 (at least 20% in profit). Of course I am not the only one who has understood the potential gains that can be made with this coin. But let's get back to us.
After the scandal that led inexorably to the depeg, the uproar broke out on twitter. I have reported some interesting tweets.
During the depeg to balance the positions, the liquidation of the underlying gradually took place. Do Kwon tries to explain to everyone what is happening.
Pedro trying to determine the end of the depeg with an interesting chain of tweets. Luna Foundation Guard makes everyone understand that the underlying is there, and it is no small thing. In the meantime, many users, worried about the huge amount of tokens created with the pair between LUNA and UST, decide in total autonomy to send their tokens to a burn address. All this because practically overnight the value of LUNA has plummeted dramatically.
Here is a tweet from a user who burns a million coins. A couple of days later, the #lunaburn tag became very popular, with over 270 million tokens burned. By burned tokens we mean the sending of tokens to an address that is intended to receive and not to send coins, a burn address.
Phantomplanet with a tweet suggests a massive burn of tokens to restore balance. Here the famous Fatman intervenes by responding to the fork proposal to create a new currency, which will replace the current one. The new coin will be called LUNA (or luna2) while the old coin will be called LUNC.
Finally, the last tweet I recorded in the initial draft of this article, dated 05/25/22 where 294 million coins were burned. From here on you will be able to see "fresh" data updated to 31/08. Today I posted some data on #lunaburn on twitter:
The supply at the moment is very high, but it is also true that 2.5 billion coins have been burned. Therefore, the way towards deflation is basically being sought, even if the mechanism with which UST operates should be reviewed, in order to consider the real value of LUNA and act in such a way as not to create an excessive supply. A small example of what I just said:
https://decrypt.co/resources/what-is-terra-algorithmic-stablecoin-protocol-explained
# UPDATE 31/10 #
The current market situation is as follows:
There was a noticeable increase in activity throughout the month of September, a small mass sale towards the end of the month and then the price resumed.
Same thing with the BTC chart.
In the last week there has been a recovery on the trading side, with a significant rise (the graph below emphasizes this) but that is not enough to recover all the lost ground.
Below are the current statistics on prices, volumes and market caps.
Finally, let's talk about the total supply of the coin.
Until now there have been several twitter accounts that have decided to follow the trend of the tokens burned on LUNC.
Currently, there are almost 25 billion tokens burned, but to have a net increase in the price, it would be necessary to reach 2 trillion as soon as possible. The advice I can give to all current LUNC investors is to stake everything and then burn the profits from staking. in this way we can all contribute to the recovery of this token, now ruined by the hand of Do Kwon.
If you liked this article, please leave a nice along with a little tip (it helps to create more articles like this one). Also, if you don't want to miss any other article, subscribe to my blog now! See you in the next article!
cover image: heraldsheets_com
