What is Terra (LUNA) crypto and why is it grabbing attention?

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What is Terra (LUNA) crypto and why is it grabbing attention?

Terra crypto
Image source: © Moxumbic | Megapixl.com
Highlights:
  • On Tuesday, February 22, Terra and the Luna Foundation Guard (LFG), which supports the Terra Network, announced the sale of LUNA tokens worth US$ 1 billion.
  • The LUNA tokens were sold to Three Arrows Capital and Jump Crypto. It is believed that the Luna Foundation will use the sale proceeds to create a UST Forex Reserve.
  • The Terra network is a blockchain protocol that powers price-stable global payments systems through fiat-pegged stablecoins.

The global cryptocurrency market appears to be recovering from the recent crash and was trading in the green when drafting this article.

In the last 24 hours, the global crypto market cap jumped five per cent and reached US$ 1.75 trillion. Meanwhile, the price of Bitcoin and ETH was up about five and seven per cent, respectively.

Also Read: What is Catcoin crypto & why its price is skyrocketing?

Amid the recovering crypto market, an altcoin seems to have grabbed crypto investors' attention. We are talking about Terra (LUNA) cryptocurrency as its price jumped 15.3 per cent since the last day, and it was priced at US$ 57.35 per token at 4:30 AM EST.

Why is Terra (LUNA) crypto gaining momentum?

On Tuesday, February 22, Terra and the Luna Foundation Guard (LFG), which supports the Terra Network, announced the sale of LUNA tokens worth US$ 1 billion.

The LUNA tokens were sold to Three Arrows Capital and Jump Crypto. It is believed that the Luna Foundation will use the sale proceeds to create a UST Forex Reserve.

Notably, the LFG is a Singapore-based non-profit organization, and it was created to support the Terra ecosystem. Meanwhile, UST is an algorithm-driven stablecoin that seems popular within the decentralized finance (DeFi) ecosystem.

Terra crypto                                                                                        ©2022 Kalkine Media® 

The UST is pegged to the price of an American dollar, and its market capitalization is reportedly worth US$ 12 billion. 

Luna Foundation aims to create a reserve to act as a release valve for redemptions of the stablecoin. The organization reportedly aims to keep the price of UST pegged to the US dollar during periods of sharp selloffs in the crypto market.

Unlike stablecoins issued by Tether and Circle, algorithm-based stablecoins remain pegged to market incentives and don't need collateral to maintain their price.

Bottom line

The Terra network is a blockchain protocol that powers price-stable global payments systems through fiat-pegged stablecoins. The development of this network began in 2018, and its mainnet was launched in 2019.

The LUNA crypto stabilizes stablecoins of Terra network, and its holders can use the native token to vote on governance proposals.

According to CoinMarketCap, Terra crypto's 52-week high is US$ 103.33 per token, and its 52-week low is US$ 3.94 apiece.

Also Read: Why is Bitgert (BRISE) crypto grabbing attention?

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