After two consecutive days of sharp decline, the price of cryptocurrency Luna has fallen below US $2 and the market value is only US $1.1 billion. While ust fell below US $0.21 at the lowest level, in a state of serious decoupling from the US dollar. According to coingecko, Luna reached a high of $119.5 on April 5 and reached a maximum market value of $41 billion.
Terra is a blockchain network created using cosmos SDK and is committed to creating stable coins. The largest algorithmic stable currency on terra chain is UST, while Luna is the original POS pledge token of Terra chain. The price of Luna will directly affect the security of the chain, which means that the higher the price of Luna, the higher the economic value that can be safely carried in Terra chain.
As an algorithmic stable currency, ust maintains its peg to the US dollar through a set of coinage and destruction mechanism on the chain. That is, in theory, these mechanisms should ensure that traders can always exchange ust worth $1 for Luna worth $1. Luna has a floating price, which is designed to serve as a "shock absorber" for the fluctuation of ust price.
Anchor is a fixed rate savings agreement set up by Terra team. It provides users with stable currency savings products and pays interest to depositors, with an annual interest rate of 20%. Anchor's total locked in value (TVL) has fallen by $11 billion over the past two days. Just a week ago, TVL peaked at $17 billion.
Since its launch, Luna's reputation has been polarized. As Luna has made ust the third largest stable currency in the market value of encryption market under the condition of close to zero mortgage, Luna is accompanied by the questioning voice of "stepping on the air" and "Ponzi scheme", while its supporters call themselves "lunatics" and are extremely optimistic about it.
Blue whale previously reported that the stable currency is no longer stable, the first algorithm stable currency ust is decoupled from the US dollar, and Luna plummeted by more than 56%. Due to the continuous fluctuation of the cryptocurrency market recently, according to coinmarketcap, the market value of Luna is lower than the market value of UST, hanging upside down, the holder flees from the spread of emotion, and death stampedes on the market. On May 10, Qian'an suspended the withdrawal of Luna and ust due to the accumulation of transactions, and then resumed in the afternoon.
Luna foundation guard (LFG) is a non-profit organization focusing on the development of Terra ecosystem. It is also the second largest enterprise holder of bitcoin in the world. In the terra crisis, LFG issued a loan of US $1.5 billion (US $750 million for BTC and US $750 million for UST) and announced the rapid deployment of 28205 bitcoins to defend the anchored exchange rate by purchasing ust and providing liquidity on the exchange, but it did not support it for a long time. Bitcoin also fell. On May 10, bitcoin fell below the $30000 mark, with the lowest quotation of $29735, hitting a 10 month low.
Today, Terra founder do Kwon voiced that I know the past 72 hours have been very difficult for all of you - knowing that I am determined to spend this crisis with each of you, we will build our own way out.
Do Kwon said that in order to make the system absorb ust faster, Terra will approve the community's proposal to increase basepool from US $50 million to US $100 million special drawing rights and reduce the pool recovery block from 36 to 18. This will increase the mint capacity of ust from US $293 million to US $1.2 billion. This will increase the coinage capacity from $293 million to $120 million.
At the same time, on the Luna section of social platform reddit, the post on psychological rescue has been placed at the top: "for everyone who is panicked, here are some national help line numbers." And "for those considering suicide, this is my attempted suicide story."