Luna belongs to Terra blockchain, which was established by Terraform Labs, a Korean firm. Around 32 million dollars were raised for LUNA’s funding by selling LUNA coins privately. Centralized sources like OKEx, Binance, and Huobi invested in this coin and hoped to find it as profitable as other digital currencies or tokens in the market.
Daniel Shin, an incredible investor, and entrepreneur led the founding team. He graduated from Philadelphia and then founded a fintech company known as HOF.
When did LUNA launch?
In 2019, LUNA was launched and also got on the list of the most successful coins in decentralized finance. It also got ranked seven on the list of high market capitalization rates. There was a huge buzz regarding this virtual token in the entire blockchain technology platform among the people who used it and suggested it to more people for investment purposes.
The token was doing pretty well in the market until its recent crash. It has collapsed and failed to acquire the 214th spot. This happened on 1st June 2022. We are hoping that LUNA will come back to the market with a bang in 2023, but it seems quite difficult at this point. Keep reading this blog to know more about what future predictions are in place for LUNA.
But First, Let’s See How does LUNA work?
The Terra blockchain had one goal, and that was to make stablecoins. These are tokens that aim to blend the decentralized nature of digital currencies with fiat money’s stability. This system needed a token/currency that would be more profitable and suitable in the future, and LUNA’s system seemed like a perfect fit.
LUNA came to be known as a protocol or staking token. The blockchain technology executed a dual token mechanism between LUNA and UST (Terra USD) to accomplish its goal. LUNA was burnt to mint USTs. Plus, USTs could be swapped easily for LUNA.
What was the Idea Behind LUNA’s System?
The idea behind LUNA’s blockchain system was simple yet intelligent. Whenever UST’s value went beyond 1 dollar, investors could mint more UST by burning LUNA. This would make it far less valuable. However, in case UST’s price fell below 1 dollar, one could easily swap it for LUNA. This approach made UST more valuable.
In short, both LUNA and USTs are dependent on one another for their stability. It became highly important to burn LUNA to achieve this mechanism. It gave users an incentive by promising them LUNA’s value and UST’s stability. This was kind of a win-win strategy.
How did LUNA Collapse?
This year around May, there were many problems in Terra’s digital ecosystem. They were blatantly exposed, and as a result, LUNA greatly crashed in its value. When bitcoin hit its lowest point around 10th May, LUNA also saw a decrease in its value that went below 40 USD. It further fell to 0.00001675 on 13th May.
What does LUNA’s Future Look Like?
Many cryptocurrency experts have performed different analyses on the technical nature of LUNA. It’s concluded that LUNA can start from the minimum price of 3.39 USD to a higher price of 4.11 USD in the year 2024. On average, LUNA may achieve a trading cost of 3.51 USD.
In 2023, we may still see a decline in LUNA’s progress, going below 2 USD, and can fall even below it. We will see it declining more than its present value, and it may become worrisome for this blockchain’s founders.
Conclusion
While many investors believe that LUNA could have been a good investment. While critics believe that people are starting to lose their trust in blockchain technology because of the extreme volatility and unpredictability spreading widely in the market.
Every investor needs to know whether or not their investment will result in profitability later or not. There needs to be a reward for someone’s patience, persistent efforts, and money. However, one cannot find such aspects while investing with LUNA. While hitting an all-time low, people also don’t consider using blockchain platforms or indulging in trading activities.
The future for LUNA seems predictable for now, but if the founders come up with something resourceful, the game can turn around.