Luna crypto recovery plan

Price history: WLUNA’s fall

It should be noted that WLUNA’s price action is directly correlated to the performance of LUNA Classic.

WLUNA was trading at about $14 at the time of its launch in August 2021. As Terra’s ecosystem gained traction and saw increased investor and developer activity, WLUNA prices surged to over $86 by the end of 2021.

As Terra soon became a leading network for DeFi, with the total value locked (TVL) on the network skyrocketing to over $20bn according to blockchain data website DefiLlama, WLUNA coin soon hit an all-time high of $263.98 by 16 November 2021.

However, WLUNA/USD’s price saw a jaw-dropping fall in early May 2022, as UST began depegging and investors started withdrawing their capital from the Terra ecosystem.

Luna crypto recovery plan

WLUNA is minted on Ethereum according to ERC-20 standards.

Wrapped LUNA: Origins

Launched in August 2021, the Wrapped LUNA cryptocurrency is a version of the LUNA Classic token outside its native blockchain.

The LUNA Classic token is the native cryptocurrency of the Terra Classic blockchain. The token is used for staking, and for governance purposes on the network.
More importantly, LUNA Classic tokens were designed to maintain the dollar peg of Terra Classic’s algorithmic stablecoin TerraUSD (UST).

However, in early May 2022, the Terra Classic ecosystem collapsed after UST depegged to trade at about $0.02 by the end of the month.

Terra luna crypto recovery plan

On behalf of Binance, CZ asked the Terra team to compensate retail users first and supported the prioritization of the smallest wallets with UST deposits on Anchor. Binance has nearly $1.6 billion tied up in LUNA’s collapse.

Some interesting updates, full transparency and lead to protect users:

As it turns out, most UST pairs were 0 fee to begin with. (I didn’t know that, our team had to tell me.) So, not much UST there.

We do have…

— CZ Binance (@cz_binance) May 16, 2022

Kwon has requested community members for patience as Terraform Labs works on multiple tasks to stabilize UST, repeg it and drive a recovery in LUNA.

While the new Terra 2.0 chain has put a recovery plan in place, the future of the Terra Classic chain remains in limbo.

There are, however, some positive signs based on on-chain activity. Data from analytics website Santiment showed seven-day development activity on the Terra Classic chain hit all-time high levels in the first week of June 2022.

Elsewhere, data from CoinMarketCap showed the total number of unique addresses that hold WLUNA and LUNA Classic has jumped since mid-May 2022.

A total of 33,865 unique addresses held WLUNA on 14 May 2022. That number had nearly doubled to 65,636 as of 6 July 2022, according to data from CoinMarketCap.

The same data also showed a high whale concentration for WLUNA, with the top 10 holders holding nearly 70% of the total supply.

Only time will tell if the currency can recover from its recent crash, but Kwon’s proposal offers a glimmer of hope for holders who have seen their investment disappear overnight.

Price Action

LUNA lost 98% during today’s trading and changed hands at $0.03637, accelerating its weekly crash to about 100%.

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Fairdistributions” posted on Wednesday:

IF you want a fair fork. Please distribute people according to the supply they purchased at, or maybe take a snapshot before the last halt.

Despite South Korean authorities launching “emergency inspections” into domestic crypto exchanges “to enhance investors’ protection”, Do Kwon is moving forward with his LUNA recovery plan, which will see Terra Core release cut and a new network launch made available to validators next Saturday, May 21st.

Previous Update (May 17th): Do Kwon, CEO of Terraform Labs, is moving forward with his “Terra Ecosystem Revival Plan 2.” Following last week’s collapse of the Terra stablecoin peg to US dollars and the subsequent demise of its native token LUNA, which plummeted from $87.68 to the current $0.0002 levels, Kwon announced a collaborative plan of action with the Terra community.

WLUNA, which had been trading at about $84 at the end of April 2022, fell over 60% to about $30 in the first 10 days of May.

By 12 May 2022, WLUNA was valued at less than a dollar. As of 6 July 2022, WLUNA is valued at $0.000116.

1/ This should be obvious, but the claim that I cashed out $2.7B from anything is categorically false

— Do Kwon ???? (@stablekwon) June 12, 2022

Outlook: Does WLUNA have a future?

The new community vote proposed by Kwon saw the Terra blockchain split in two separate chains.

The vote was passed on 26 May and the old chain was rebranded to Terra Classic, while its native token was renamed Luna Classic.

The old and new chains operate separately and exist in parallel to each other.
The new Terra 2.0 chain has also decided to ditch the algorithmic UST stablecoin.

The Luna Foundation Guard has spent $3 billion stabilizing TerraUSD’s peg, however, UST has failed to recover.

Terra’s LUNA struggles to recover despite forking plan

The Luna Foundation Guard has spent billions of dollars reinstating TerraUSD’s (UST) peg. However, UST price is struggling to make a comeback.

At the time of writing, UST is priced at $0.082, 91.8% lower than its $1 peg.

Do Kwon, the CEO of Terraform Labs, came up with a recovery plan for Terra’s tokens. The Luna Foundation Guard Council proposed forking LUNA to a new chain, using a snapshot from before the attack on the blockchain.

In other words, each USDT or USDC traded in the market is backed by what’s actually in the possession of the stablecoin issuers.

Kwon’s mechanism involves burning and minting UST/LUNA to retain price stability. The mechanism is designed so that when the price of UST falls, the system automatically burns UST/LUNA.
When the price of UST rises, the system mints new UST/LUNA. As mentioned, the purpose of the system is to keep the price of UST stable.

The mechanism is also designed to be self-regulating given the supply of UST/LUNA is constantly being adjusted to meet the demand. When there is more demand for UST/LUNA, the system mints new UST/LUNA. When there is less demand, the system burns UST/LUNA.

The mechanism is also transparent since all transactions are recorded on the blockchain.

Luna price has diminished dramatically.”

5/ The price stabilization mechanism is absorbing UST supply (over 10% of total supply), but the cost of absorbing so much stablecoins at the same time has stretched out the on-chain swap spread to 40%, and Luna price has diminished dramatically absorbing the arbs.

— Do Kwon 🌕 (@stablekwon) May 11, 2022

According to Kwon, the recovery process has to start with the absorption of “the stablecoin supply that wants to exit before $UST can start to repeg.”

Meanwhile, Kwon’s proposal to increase the base pool from 50M to 100M and decrease PoolBlockRecovery from 36 to 18 is a smart move that will help absorb the UST in circulation and help it rebound to its earlier dollar peg.

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