What is Luna?
The Luna classic token known as (LUNC), the original token of the Terra blockchain, is on crash mode. Terra was launched in 2018, and the collapse of the blockchains algorithm stable coin TerraUSD in May resulted in a new blockchain. This new blockchain Terra 2 inherited the famous Luna name, and the previous token was rebranded to Luna classic (LUNC).
The firm that created the coins anticipated that the protocols and applications of the previous network would move to the new blockchain (Terra 2). However, as of June 2022, the original Terra blockchain’s usefulness remains unknown.
In May 2022, LUNCs peaked at $119.02 while still being considered the old LUNA. The token managed to get to the top 10 list of crypto by market cap in less than a year. Anchor, Terra’s yield-generating platform, was the main factor driving the market, offering eye-popping but ultimately unsustainable yearly returns of up to 20% on Terra deposits. As Anchor deposits surpassed $14 billion in Terra in April 2022, the circulating quantity of the old LUNA tokens dipped below 400 million tokens for the first time in history.
Early in May 2022, the price of Terra strayed from the $1 peg. Investors began to abandon Anchor, the primary engine of Terra’s demand. Steps to restore the peg were short-lived. It lost its price peg again during the week of May 9, 2022, finally plunging to cents. The collapse of Terra and Anchor pushed the initial LUNA into a hyperinflation cycle resulting in its price falling to cents.
The Luna crash affected the cryptocurrency market to its root. The CEO of Terraform Labs, Do Kwon, launched Luna 2.0 to revive the Terra Ecosystem as a new version of Luna, which is now called LUNC. The Luna 2.0 continues to interest investors, and there has been much speculation about its pricing and future viability as a tradeable asset.
Is it now considered dead?
The LUNA coin price fell drastically due to liquidation and, over time, became vulnerable due to inflation. As a result of the increased trading volume and inability to fulfill demand; the tokens’ market cap dropped by close to $40-$50 billion. What’s more concerning is that the Luna had a $119 bull run before the crash. It is now worth fractions of what it once was.
Is it worth investing in?
Due to the Luna crash, we don’t know where it’ll be headed. It is in a bearish state, and analysts are hoping that it makes a turn into a bullish market. Many are hoping that LUNA 2.0 will be able to reach a high of $11 and slowly gain from there. The highest analysts expect it to rise is to the $26 – $29 range.
Many thought that this was a dead investment and began to sell the assets. However, we don’t know what the future holds in the coming years. However, it is recommended to trend cautiously because of what it has been through.