Terra

Terra (LUNA) is a public blockchain protocol that emerged from Terra Classic. Due to limited liquidity, LUNA sell orders will not be accepted from 10:51 PM - 11:11 PM CT. Please submit your orders outside of this window.

On Thurs. May 25, Terraform Labs announced that the Terra community had approved the creation of a new blockchain, Luna 2.0. The creation of this new chain is a response to unprecedented volatility on the Luna 1.0 chain, which caused the price of the original LUNA and UST to collapse almost to zero. 

As part of the migration, the former asset LUNA will become Luna Classic, or LUNC. A portion of LUNA holders will be eligible to receive an airdrop of the new token (LUNA), per the terms outlined by Terraform Labs.

The new Terra blockchain will utilize the new LUNA, and will not include the UST stablecoin. 

On 9 May, after nearly 18 months of steadily holding its value against the US dollar, the so-called stablecoin TerraUSD (UST) became unpegged. The uncoupling triggered a cascade response that ultimately crashed UST and the Terra (LUNA).

TerraUSD (UST) is a stablecoin, which means it is a cryptocurrency pegged to a fiat currency. In this case, it is designed to be pegged to the US dollar. Stablecoins are intended to allow investors to hold crypto assets with less volatility, and trade a dollar equivalent without needing to cash out their positions. 

UST is considered an algorithmic stablecoin because instead of being backed by assets such as cash or cash equivalents, it is supported by on-chain code that facilitates a change in the supply and demand between UST and LUNA.

LUNA is the cryptocurrency that works in unison with UST in an effort to keep UST in 1:1 parity with the US dollar. One dollar of LUNA can always be converted at a 1:1 ratio to 1 UST. 

For example, if LUNA is trading at $10, then it can be redeemed for 10 UST, and 10 UST can be redeemed for 1 LUNA. If UST rises above its $1 peg to $1.01, then traders can swap 1 USD of LUNA for 1 UST. This trade burns 1 LUNA and mints 1 UST, which can then be sold for 1.01 USD. 

If UST rises to $1.02, then traders can sell for a 2 cent profit, and so on. 


In theory, increasing the supply of UST and lowering the supply of LUNA brings the price of UST back down until it reaches $1. Conversely, if UST drops below the $1 peg, then traders will be incentivized to buy 1 UST for 0.99 USD, which can then be swapped for 1 LUNA. 

This move burns UST and mints LUNA, sending UST higher towards the $1 peg.

UST lost its peg to the dollar starting on May 8th following large withdrawals of UST from Terra’s DeFi protocol Anchor. UST fell quickly, and struggled to regain its peg because the burning of UST and minting of LUNA couldn’t keep up. 

UST descended rapidly as the prolonged de-pegging led to uncertainty and a snowball effect of larger withdrawals. 


A significant share of circulating UST was locked on Anchor, a Terra-based lending and borrowing protocol that paid users 19.5% to stake UST. 

The LFG used up about $2.9 billion of its bitcoin reserves in an unsuccessful attempt to revive UST. 

WSJ 
Decrypt 
Bloomberg

*This content is for educational purposes and is not investment advice.

While it's unclear what caused LUNA's spike, a researcher at The Block suggests that ATOM's pump earlier Friday morning could be connected. The post LUNA's price more than triples, pushing market cap near $1 billion  appeared first on The Block.

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Stablecoin issuer Terra (LUNA) is seeing a massive price increase months after the protocol's stablecoin depegged from the US dollar and lost over 99.9% of its value. The Ethereum (ETH) competitor exploded from $1.96 to $5.

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Vitalik Buterin, the Ethereum (CRYPTO: ETH) blockchain co-founder, recently said that the decline in the price of crypto assets is suitable for the market as it will expose weaknesses.  During a recent interview, Buterin said that crypto prices dropping are good at revealing problems that were always there from the beginning.

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TerraForm Labs CEO Do Kwon is facing a new class action lawsuit for his involvement in the collapse of the Terra ecosystem earlier this year. Kwon is alleged to have promoted LUNA, UST and the Terra-based lending platform Anchor despite knowing that the projects would be unsustainable.

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When the Terra $UST algorithmic stablecoin de-pegged in May 2022, many feared that the crash would lead to a systemic crash of the entire cryptocurrency industry. Dan Thomson, the Chief Marketing Officer of leading DeFi platform — InsurAce, recounts how their prompt insurance payouts to over 155 victims who lost funds in the crash helped to sustain investor confidence in DeFi at such a critical period.

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A crypto investor who got in early to Terra (LUNA) is reporting staggering losses in the billions. According to a new report by Bloomberg, Simon Seojoon Kim, a South Korean crypto investor and early LUNA adopter, is revealing $3.6 billion in losses after the Terra ecosystem disintegrated in May.

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CEO Simon Seojoon Kim tells Bloomberg that Hashed had bought 30 million luna tokens in the blockchain project's early days. The post Crypto VC firm Hashed confirms losing more than $3 billion in luna crash: Bloomberg appeared first on The Block.

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The London-based firm's exposure to Terra resulted in its first negative quarter since going public.

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TerraForm Labs (TFL), the creator of Terra (LUNA), is being slammed with a class action lawsuit from US law firm Bragar Eagel & Squire, P.C.

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“What we failed to realize was that Luna was capable of falling to effectively zero,” Three Arrows Capital co-founder Su Zhu said.

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Prosecutors raided the Seoul home of Terraform Labs co-founder Daniel Shin as part of an investigation into the collapse of Terra's UST.

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South Korean authorities are continuing their investigation into fraud allegations at the center of the Terra collapse.

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South Korean prosecutors carried out search and seizure operations at local crypto-currency exchanges and related offices, looking for evidence of illegal practice involved in the collapse of crypto-currency Luna in May.

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South Korean prosecutors have reportedly raided seven local cryptocurrency exchanges as part of the investigation into Terraform Labs. The post Prosecutors raid South Korean crypto exchanges in Terra investigation: Yonhap appeared first on The Block.

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Seven exchanges and eight other addresses have been raided in connection to the Terraform Labs fraud investigation.

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