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It is becoming increasingly clear that altcoins, which have real use in the world, often ignore the movement of BTC and go their own way. One such project is LUNA, which has strong foundations. That is why it recorded an increase of 162% over the past week.
Terra protocol
It is a blockchain protocol that it supports stablecoin TerraUSD (UST). It is, of course, pegged to the USD currency currency. Since the beginning of August, the TERRA project has managed to successfully ignore the declining trend of BTC.
Data show that the price was able to fire by 162% from a low of $ 5.53 on July 20 to a maximum of $ 14.51 on August 3. Among other things, the 24-hour trading volume increased from $ 137 million to $ 774 million.
Main growth factors
The TERRA protocol owes strong growth to three events in particular. It is the expanding ecosystem of LUNA, the addition of some form of Ether to the Anchor protocol that brings the ecosystem a reward for staking ETH, and last but not least the economics of the protocol itself, which helps circulate the supply of LUNA and UST.
The LUNA ecosystem attracts new investors
This is one of the most significantly expanding projects, with new projects launched on the Terra blockchaine constantly being added.
The ecosystem offers access to DeFi, NFT and other blockchain networks such as ETH and Solana. We currently record support for 17 Fiat currencies on this protocol, including the euro, the dollar and more. This offer will be further expanded in view of the rapid development of the protocol.
Anchor protocol
The second strong factor in the rising price of tokens is the Anchor protocol, which allows receive a reward for staking ETH. A vote is currently underway to add another Ether that would allow the UST to be minted.
A proposal to list bETH (wrapped stETH on Terra) as collateral to @anchor_protocol has been submitted🏝️
This will allow users to borrow UST against staked ETH collateral and earn liquidity mining rewards using Anchor’s collateralized lending.https://t.co/ThQrW9PGyc pic.twitter.com/C1DGLhqQZL
– Lido (@LidoFinance) August 2, 2021
Extreme demand for stablecoin UST
The last significant factor in the rising price of LUNA is the very economy of the protocol used to mint the UST. The whole process works by burning an equivalent amount of LUNA tokens to knock out a certain amount of UST.
This mechanism ensures that new USTs enter the market, keeping the protocol price binding at $ 1.
Last 7 days of $Luna burning in dollar value 🔥
Compared with current price,
41.95M dollar worth of $Luna has ben burned in just 1 week. 🚀Imagine what'll happend when all the projects building go live 😱.$bEth about to go live on @anchor_protocol. $Anc ✅
LGMI🌖 pic.twitter.com/brcafuNc8w
— Shiizzle.! (@_Shiiizzle) August 2, 2021
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