The recent fall of the Luna cryptocurrency and the stablecoin that are linked Terra blockchain has drowned the crypto market. Though many are presuming the entire crypto market will collapse as a result, it is still stumbling to heal.
TerraUSD is not backed by any of the traditional assets be it cash or treasuries or any other form of assets. Its value is determined by the algorithms that tied it to Luna.
When Luna’s entire worth exceeded $40 billion, traders and investors were swept up with delirium excitement.
When Luna’s UST stablecoin, Terra was de-pegged from the US dollar on May 7, the worth of Luna token dropped. Terra is backed by the Luna tokens and billions in Bitcoin. To cope with the fall LFG spent its Bitcoin which also failed.
The Terra blockchain was stopped after UST plunged to the all-time low on May 13 and made it worst for the sister token Luna.
In the eyes of some retail investors, it was not a matter of a joke as many investors invested in Luna or TerraUSD became desperate even when some shared list of suicide hotlines.
Many people are thinking that the story of Luna is over while the CEO of Terraform Labs, Do Kwon has asked the community members whether the stable should be ditched or they should welcome a new one in this place.