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Terra is a decentralized financial payment network. Due to a governance proposal, it now consumes more than US$4 billion worth of LUNA. Recent changes in funding seem to have caused the asset’s price to rise to an all-time high (ATH) level. The rise was also accompanied by new proposals to further consolidate the stability of its stablecoin UST. Do Kwon, the head of Terraform Labs, hinted at the USD peg that contains Bitcoin reserves to protect UST.
LUNA is booming
recent Variety In Terra’s release model, the recent Columbus 5 The update seems to have successfully promoted the growth of the network currency LUNA.this Price The assets of its native asset LUNA have grown substantially, reaching the ATH level of US$69.59 yesterday, and the price has risen by more than 50% last week. One of the most interesting options for cryptocurrency projects is to destroy LUNA worth more than $4 billion in the project community pool.
These LUNA tokens have been redeemed for the project’s brother stablecoin UST, and are now waiting to be used for other purposes. This is part of the UST distribution model changes.
Hint at a new hybrid model
So far, no other tokens have been used as collateral to support the value of the UST stablecoin. In some cases, this may cause the peg to the base currency (USD) to be lost for different reasons. Due to the limitations of the model and the motivation to maintain the token peg in some cases, Terraform Labs CEO Do Kwon hinted that other solutions will be introduced to solve this problem.
Toquan statement In a recent Twitter post:
I’m tired of arguing with idiots on Twitter whether UST can remain stable in a bear market. Soon I will propose to create billions of dollars in reserves in decentralized assets (Bitcoin And others) trying to save their time.
If this happens, Terra will become a hybrid project with a feature that reserves will support the value of the UST stablecoin in a bear market. In addition, Kwon implies the use of UST locked in the community pool as currency insurance and as a support to protect UST from possible decoupling.
Editor’s note: Since this article was written, the market has experienced a sharp decline on December 4, and Terra (LUNA) has fallen by more than 17% in the past 24 hours.
What do you think of the recent rise of Terra in the market? Tell us in the comments section below.
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