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Terra LUNA Developers Unveil 4-Year Plan to Revive LUNA Ecosystem

TLDR

The Terra LUNA Expedition is a four-year program that aims to improve the Terra ecosystem through a variety of initiatives.

About Terra LUNA

Terra was a blockchain platform that served as the foundation for a network of decentralized stablecoins. Its currency, also known as LUNA, functions as a decentralized reserve. The private sale of LUNA coins raised $32 million to fund this development. Investments came from centralized sources such as OKEx, Huobi, and Binance.

LUNA came into existence in 2019 and quickly became one of the most successful decentralized finance coins. CoinMarketCap once ranked seventh in terms of market capitalization. Since the recent crash, it has fallen to 214th place as of 1 June 2022.

Revival of a Mighty Network

Earlier this week, Terra developers floated a new proposal to revitalize the once-mighty network. The proposal must be supported by the majority of LUNA tokens to be implemented.

The new initiative would be supported by 9.5% of the total supply of LUNA tokens. That was set aside for the launch of a new Terra blockchain.

The incentive program would last four years and be managed by a community-elected committee. Committee would evaluate the plan every 12 months. The proposal seeks to align network incentives better to attract developers, gain new users, and promote liquidity.

Why did LUNA’s price plummet so dramatically?

The following factors contributed to the rapid drop in the price of LUNA:

  • The price of LUNA steadily declined after UST, Terra’s stablecoin, fell below USD 1, causing investors to flee.
  • On May 9, 2022, the US dollar depreciated, resulting in the UST crash. The incident, according to a BusinessToday analyst, has sent shockwaves through the crypto market because it reveals the limitation of stablecoins that rely primarily on the supporting algorithm (unlike the USDT and USDC which are backed by fiat money). Investors sold off LUNA due to the collapse, resulting in the largest drop on record.
  • In early 2022, the LUNA price skyrocketed due to high UST demand on the Anchor protocol, increasing the APY by 20%. Given the current state of the economy, however, this stablecoin model might not be the most stable option.

LUNA current price chart:

Terra Luna

LUNA incentives are available through various programs

A developer grants program will receive 20 million LUNA tokens from the allocation. Developers of various apps will be compensated following a successful audit and project launch on Luna’s main network. Decentralized exchanges, lending protocols, stablecoin issuers, and derivatives protocols are some of the projects mentioned in the proposal.

Projects will also be eligible for up to $40,000 in smart contract audit reimbursements. Crypto security is still an issue in the blockchain world.

Another 20 million LUNA tokens would be distributed to developers working on Terra. Any project deemed “essential” by the community and with an app on Terra’s network would be eligible. According to the proposal, the tokens will be distributed every quarter.

There has also been proposed a liquidity mining incentive scheme consisting of 50 million LUNA tokens distributed over four years. These funds would be used to support the initial liquidity of Terra-based decentralized exchanges, stablecoins, bridges, and other protocols of a similar nature.

Developers have also proposed rewarding users with five million LUNA for using the network’s bridges and decentralized applications, as well as minting non-fungible tokens (NFT) on the platform.

The original proposal called for a portion of the total LUNA supply to be distributed based on the value locked up in Terra-based protocols, but such distribution would now “mainly benefit a few protocols” and thus would not have the intended effect of reviving the Terra ecosystem.

Terra-related applications lost $28 billion in value following the implosion of Terra and its LUNA and UST tokens in May. Terra-based applications have only $40 million in locked value spread across seven protocols by now.

Terra’s Price growth (LUNA)

The price movement of Terra (LUNA) from 2019 to 2021 is shown below.

Terra Luna

LUNA was initially made available for purchase in private token sales on several major exchanges. Terra raised 32 million USD from the sale, which ended in August 2018.

A year later, on August 2, 2019, Terra (LUNA) was worth USD 1.34. The price then skyrocketed on August 14 to reach 1.40 USD.

This increase, however, was followed by a decrease. Until the end of 2019, the value of LUNA was 0.26 USD.

The highest Terra (LUNA) price in 2021

Terra Luna

Due to a massive sell-off, the price of LUNA fell by approximately 81 percent in May 2021. LUNA, on the other hand, managed to reverse its position in early December 2021.

On December 5, 2021, LUNA reached an all-time high (ATH) of 77.14 USD. According to Coingecko data, Terra has increased by more than 50,000% since its all-time low price (ATL) of 0.1 USD on March 18, 2020.

Conclusion

In the last two years, LUNA has been one of the best-performing cryptocurrencies, increasing by nearly 76,130 percent. However, there is always the possibility of unanticipated risk when investing. The UST crash caused a significant drop in the value of the LUNA coin. As a result, investors must monitor the market and conduct thorough research before making a decision.

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