LUNA is the native token of the Terra blockchain, a platform at the forefront of revolutionizing decentralized finance (DeFi) through its innovative approach to stablecoins and scalable blockchain solutions.
Terra aimed to combine the stability and wide adoption of fiat currencies with the efficiency and programmability of cryptocurrencies. It achieved this by leveraging its family of algorithmic stablecoins, which are pegged to various fiat currencies. These stablecoins, including UST (TerraUSD), provide a stable and secure medium of exchange within the Terra ecosystem.
The Terra network was founded by Daniel Shin and Do Kwon. They co-founded Terraform Labs, the company responsible for the development of the Terra blockchain. The exact date of the network's founding is unclear, as its development spanned several years. However, Terraform Labs began working on Terra as early as 2018, with the blockchain officially launching its mainnet in April 2019. Daniel Shin currently serves as the CEO of Terraform Labs, while Do Kwon is the co-founder and CEO of the company.
Terraform Labs, the driving force behind the Terra network, introduced the UST coin as an algorithmic stablecoin. In contrast to traditional fiat-backed stablecoins like USDC or Tether, UST operates on a different principle. Rather than being backed by real-world assets, the value of UST was supported by its sister token, Luna. This unique approach was supposed to ensure stability within the Terra ecosystem, creating a reliable and decentralized mechanism for maintaining the value of UST.
LUNA served as the native token of the Terra blockchain, akin to how Ether operates within the Ethereum network. In April, the value of a LUNA coin reached approximately $116, but eventually experienced a significant decline, plummeting to a fraction of a penny before being delisted. However, prior to this downturn, LUNA witnessed a remarkable ascent, with its value surging from less than $1 in early 2021. This substantial growth within a year resulted in the creation of numerous crypto millionaires who had invested in LUNA.
Following the collapse of Terra's algorithmic stablecoin, TerraUSD (UST), the native token Luna suffered a severe crash. On May 7, a significant amount of UST was unstaked and liquidated, leading to a rapid decline in its price from $1 to $0.91. This triggered panic selling and a subsequent depegging of UST. As a result, Luna's value plummeted, causing crypto exchanges to delist Luna and UST pairings. Ultimately, Luna became worthless and was subsequently abandoned.
Following the initial crash, Do Kwon presented a recovery plan for Luna, instilling temporary optimism in May. However, the coin eventually experienced a significant decline and was subsequently abandoned. In response, Terra launched a new coin, Luna 2.0.
The creation of the new Luna blockchain emerged as a strategic response to the significant losses suffered during the LUNA/UST crash. Terra and its investors sought a means to recover from the devastating impact of the crash. Recognizing the financial damages experienced by many, TerraLabs devised a plan to compensate investors. The establishment of a new blockchain and cryptocurrency was deemed the most effective approach to fulfill this objective. Luna 2.0 has no dependency on any kind of stablecoin, algorithmic or not.
Terraform Labs' CEO, Do Kwon, is currently under investigation in South Korea following the LUNA/UST downfall. The allegations against Kwon include fraud, while reports suggest that Terraform Labs' legal team has purportedly resigned amidst the scandal. Moreover, Kwon's co-founder, Daniel Shin, is also under investigation as part of this ongoing inquiry.
Average Fees on Terra
On Terra, there is only one fee that applies to all transactions: the gas fee. The average gas fee on the Terra is around 0.015 LUNA.
LUNA Wallets
There are several wallets that can be used to hold LUNA tokens, including MetaMask, Coinbase, ZenGo, Ledger Nano S, Trust Wallet, Trezor, Terra Wallet, Math Wallet, Guarda Wallet.
