Fundamental Analysis of Terra Luna and TerraUSD (UST) Crash
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Assalam-o-Alaikum Steemians !
I'm @moneyster, a professional level Cryptocurrency investor and an analyser. As usual, today I thought to share another Crypto-related experience with you. I hope this article will be considerably beneficial for all the Steemians in this community
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If you've read my previous article, you already know about the Terra Luna and TerraUSD (UST) project. Because I have already explained about a specific Co-project of this Terra Luna Project. However, I will simply remind you about Terra Luna and TerraUSD (UST) project through my experience and knowledge.
Basically, Terra Luna is the native token of the Terra Blockchain ecosystem and the TerraUSD (UST) is the Stable coin which has pegged to a 1 USD rate. The most interesting thing about this project is that it is a decentralized Stable coin and their Stable coin has been created with an algorithm to keep the value of 1$ at all times.
Here I must mention something about Terra Luna's algorithm. According to my research, this algorithm is created with an automated system when the UST price increases rapidly, Luna Burn and Mint New UST Tokens. As a result of this, the value of the Luna Native token is also increasing. That's why Luna Native Token had gained a massive increase while the BTC was dumping.
At the same time, when the UST price decreases rapidly, Luna Supply increases and Burn UST Tokens until it pegs to 1 Dollar Rate back. As a result of this, the value of the Luna Native token is also decreasing. In this way, the Luna and UST combined algorithm had worked very smoothly by keeping their Stable Asset Pegged value at a 1 Dollar rate.
As I said before, there was a combination between Luna Native Token and TerraUSD coin with the stable coin algorithm. So, this algorithm could not keep the real pegged value of 1 USD in the UST token. As a result of this, Luna's native token dropped suddenly by more than 50% within 24 hours. At the same time, they had to lend their previously bought BTC to provide liquidity for their Stable Asset. This situation also affected the entire Crypto Market at a certain level.
However, the Luna Foundation Team is working hard to stabilize their stable coin value back and they have shared some tweets related to that. Below I have taken a screenshot that I have captured from the Luna Foundation Co-Founder's Twitter page.
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Personally, I have also invested a considerable amount of my capital in the Terra Luna Stable Coin. Because this project was very popular and this was the only Crypto project which included both Native Token and Stable coin in the Top 10 List according to Marketcap. However, the situation has changed now. Terra Luna native coin couldn't stay in the top 10 list at this time. But I hope it will recover soon as soon as their Stable Coin is stabilized. Furthermore, I think the decision of moving their BTC Collection from Luna Foundation Guard (LFG) is very bad. Because it affected the entire Crypto Market and the Fear increases rapidly. Therefore, a lot of investors had withdrawn their stakes.
I have studied the below-sourced articles to further study these topics and I have explained all the above facts in my own words and experience.
10% benificiary set for @tron-fan-club
Twitter Shared
https://twitter.com/moneyster12/status/1524060998004613121?s=20&t=N3rTN36ehB3wZzJxfAFPWg
Oh!!!!... I'm still curious and still wondering the reason behind this LUNA massive drop. I got a couple of dollars invested in it. I just hope the stablecoin stabilize and the token recovers, cause I'm in big loss already.
Yeah, I'm already in a big loss with its stable coin. However, I could buy some of Lun a Tokens at 4$. Let's wait and see. hope it recovers soon.
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Thank you very much @nane15 for your cooperation. It really means a lot to me.
Wow this is really informative I was so curious out of all popular coin to see Luna down that much but I get it now. Thank you so much I am ready glad I read this post.
You are most welcome and I really appreciate your detailed response to my article.
Hello friend, @moneyster
Thank you for publishing this interesting article, I really enjoyed going through it.
I must say, you took time in making such a quality content.
Keep up the good work, and the sky will be your stepping stone
Thank you very much @alutadefender for your detailed reply to my article. Yeah, I took some time to collect some important info.
You have made a great post on the current happening on Terra blockchain.
Thank you for sharing
You are most welcome brother. yeah I always try to share my own experience and some important crypto-related news and subjects.
I was also shocked by the massive drop but...I hope all cryptos regain there full potential in this bear market
Yeah, I hope so. Let's wait and see. I hope it will recover soon. However, try to DCA some tokens. It can be a massive gain.
I think this is a timely and very informative post. You've shared a post on the subject with us in a timely manner, thanks for sharing.
Thank you very much for such a beautiful comment on my article. yeah, I always try to deliver something related to Crypto and informative.
Reading your post I have come to better understand the Luna network a bit better and how it pertains to ust
Thank you very much for your response to my article. Yeah, it's pleasure to hear that. You can also do some research regarding this coin.
I am currently doing research as Luna has turned my $100 to $10 in a blink of an eye🥲
I tried to invest 30$ by following the DCA technique. Now my Luna Capital has reached below 1$ 😂
From the Luna dip today, many investors are happy they didn't panic and buy at the ATH so I think investor would be hesitant to buy the dip without checking if It was a rug pull or not although it isn't.
You are 100% correct. However, all the investors gone vanished as a result of this biggest crash.