Contents
- What is Terra (LUNA)?
- LUNA coin’s price history
- Mainnet upgrade to Terra blockchain
- LUNA coin price predictions for 2022 and beyond
- The future of the Terra Luna crypto
- FAQs
Read more: Terra Luna 2.0 price prediction and ultimate guide.
Terra LUNA started off as a niche platform giving life to stablecoins. It then raced into the mainstream as one of the largest cryptocurrencies, until it all came crashing down in May 2022. Is there any future for the token now?
Luna has fallenby more than 99% since the start of May, with its stablecoin UST losing its $1 peg, and some experts are saying this could be the biggest crypto blow-up in recent memory.
On top of that, production on the Terra blockchain washalted in the early hours of 13 May 2022, and technical issues passing proposals to solve the crash have held up a relaunch.
LUNA had a bullish 2021, as it harnessed a community of developers on its network and dived into the world of decentralised finance (DeFi). From non-fungible tokens (NFTs) to stock derivatives, Terra LUNA encouragedusers to build a range of apps on its open-source blockchain.
It managed to continue its momentum into the new year. The addition of a reserveof $1bn UST (Terra’s stablecoin, aka terraUSD) saw a particularly optimistic reaction from investors about the stablecoin ecosystem. All that disappeared, however, in the crash.
Terra has recently launched a new blockchain, accompanied by a new native cryptocurrency, as it attempts to leave its crashed project behind and mark a new beginning. Experts are suggesting that this could be the end for Terra’s original cryptocurrency. But there still appears to be an active community surrounding the original project, with a burn tax currently being tested by Terra Classic developers.
What is Terra (LUNA)?
LUNA coin was created by the South Korean firm Terraform Labs, and launched on cryptocurrency exchanges in July 2019.
The coin was developed on the Terra blockchain as part of a dual-token system with the stablecoin terraUSD (UST). UST was minted by burning LUNA, which gave LUNA its value and, theoretically, maintained the stability of UST.
As well as LUNA powering its stablecoin, holders could stake the LUNA cryptocurrency to provide liquidity and earn rewards. It was also used as a governance token for investors to vote on proposals affecting the network’s future.
Terraform’s whitepaper, called Terra Money: Stability and Adoption, was published in April 2019. It stated: “While many see the benefits of a price-stable cryptocurrency that combines the best of both fiat and bitcoin, not many have a clear plan for the adoption of such a currency.
“Since the value of a currency as a medium of exchange is mainly driven by its network effects, a successful new digital currency needs to maximise adoption in order to become useful. We propose a cryptocurrency, terra, which is both price-stable and growth-driven.”
LUNA coin’s price history
In 2019, LUNA launched at $1.31 but found itself on a downward trajectory for the first 18 months. After September 2019, LUNA kept recording new lows. It dropped to $0.21 on 18 December 2019, before dipping even lower to $0.12 on 18 March 2020.
On 19 August 2020, Terra announced LUNA would be listed on the exchange platform Binance. Users could stake their LUNA coins from 28 August and the price rose from the $0.33 mark in July to $0.56.However, it was not long before it dipped again. Despite UST launching in September that year, LUNA fell back to $0.32. At the beginning of 2021, LUNA started behaving bullishly.On 9 February, it reached $6.44 and climbed even higher over the next six months, hitting $34.96 on 28 August. The crypto market crash on 7 September 2021 saw it fall to a closing price of $27.79.
Mainnet upgrade to Terra blockchain
The Terra blockchain’s Columbus-5 mainnet upgrade launched on 30 September 2021, and at that point, LUNA resumed its rise.
The upgrade introduced interchain assets on other blockchains. It also led to LUNA being permanently destroyed when burned, instead of being sent to a community pool.
After the upgrade, the coin hit a high of $49.45 on 4 October 2021 and continued its upward trend to another new peak of $54.77 on 8 November 2021, rising further again to a new price record of $103.33 on 27 December 2021.
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February 2022was also an extremely active time for the coin. On 22 February 2022, the Luna Foundation Guard raised $1bn to form a UST reserve, denominated in bitcoin. Investors have been bullish about the cryptocurrency, with many seeing this reserve as a way to reduce volatility in Terra’s platform.
LUNA raced to $104.58 on 9 March. This followed a boost to the total value locked (TVL) into the network, sending it close to $30bn and making it the second-largest chain at that time, according to DeFi Llama.
It went on to reach its all-time high of $119.18 on 5 April, as Binance allowed staking with the TerraUSD stablecoin. UST was given an annual percentage yield (APY) rate of 19.6%, which is quite significant in the crypto market.
However, in May, the stablecoin network was rocked as TerraUSD dropped far below its $1 peg to a low of $0.05. This came after a plunge in the value of LUNA, which algorithmically supports UST’s peg. LUNA fell out of the top 10 largest cryptocurrencies and was ranked below 200 after the crash.
Kyle Samani, co-founder and managing partner at Multicoin Capital, told Bloomberg that there had been a “crisis of confidence” that could lead to one of the largest blow-ups in crypto history.
Kwon, determined to revive the crypto ecosystem, proposed two different plans to the community. The first involved resetting the cryptocurrency ownership of LUNA from its current six billion tokens to one billion. These would be distributed among previous holders and a community pool.
His next proposal, which was passed by the community, involved creating a completely new blockchain under the same name and ticker. Meanwhile, the original blockchain would be rebranded to Terra Classic, with the cryptocurrencies renamed to LUNCand TerraClassicUSD.
This also involved leaving behind UST, a central component of the Terra ecosystem.Kwon wrote: “While UST has been the central narrative of Terra’s growth story over the last year, the distribution of UST has led to the development of one of the strongest developer ecosystems in crypto. The Terra ecosystem and its community are worth preserving.”
Several DApps (decentralised applications) and projects built on Terra have since come out in support of this plan, including the staking platform 01node and the infrastructure provider Setten. Whether this will be enough to resurrect the cryptocurrency is unclear, even if it is passed by the community, especially as the blockchain is struggling to enact passed proposals.
There does seem to be a desireto continue improving Terra among its user community. Community members have recently shown a sacrificial willingness to burn their LUNA tokens, in an effort to drive up the price. Do Kwon, despite being unsupportive of such aplan, alsoshared a burn address for the community to send their unwanted tokens to.
The new blockchain launched on 27 May, but LUNA still has its work cut out to rebuild trust among investors and exchanges after many millions of dollars were lost. For example, Binance’s $3m investment, which reached a high of $1.6bn in April 2022, plummeted and is now worth less than $3,000.
Binance’s chief executive, Changpeng “CZ” Zhao, despite listing the new token, expressed a critical view of it in an interview with Fortune. He said: “The fact that the project team made design mistakes before [and] was slow in the operational response and hurt a lot of people already – we’ll take that into full consideration.”
Mike Novogratz, chief executive of the investment firm Galaxy Digital, said in a recent letter: “Reading the stories of retail investors who lost their savings in one investment is heartwrenching.”
Experts continue to doubt whether investors will flock to Terra again, as not all forecasters are convinced Terra can blossom again, especially as, at the time of writingon 12 August, Terra Classic was trading at $0.00009, down almost 100% from its all-time high in April. It has been fluctuating around this level since 16 May.
There iscurrently acommunity effortto implement a burn taxthat will turn the original cryptocurrency into a hyper-delaflationary asset. The 1.2% fee would be charged on every transaction.Despite this, LUNC,is still not showing many signs of recovery.
LUNA coin price predictions for 2022 and beyond
But what do forecasters predict islikely to happen to Terra Classic in the upcoming months? Most are makingLUNAcoin price predictions for 2022 and beyond that are far from encouraging for investors.
CoinCodex’sLUNA crypto price prediction expects the depreciating trend to continue.The fear and greed index is displaying “fear”,with27out of 28 technical analysis suggesting investors should sell. It wrote: “Based on our Terra Classic forecast, it’s now a bad time to buy Terra Classic.”
DigitalCoinPricedoes not think the token will pass the $0.01 mark again. The site’s LUNA crypto forecast says it will stay at an average price of $0.00012this year. This is expected to climb marginally in 2025, when an average price of $0.00018is predicted. By 2031, its Terra Luna coin price prediction suggests it will have climbed to $0.0004.
Long-term LUNA price prediction
Some of those looking further into LUNA’s future are slightly more bullish. TechNewsLeaderpredicts Terra LUNA could reach a high of $0.00013in a year.Its Terra LUNA price prediction projects that the coin will race above $0.0008 in 2027 to reach$0.006 by 2031.
Meanwhile, the LUNA crypto forecast from PricePrediction.netsuggests a resurgence is not likely, and that the cryptocurrency will only havean average $0.0004price point in 2025. It expects Terra Classic to see a gradual climband hit$0.002in 2028. According to its LUNA coin price prediction for 2030, the cryptocurrency is expectedto reach $0.003that year.
EconomyWatch’s LUNA coin price prediction is wildlymore optimistic. Its LUNA coin price prediction for 2025 says it will climb to a valuation of $100. The site argues that by 2030, more of society will be blockchain-based, and that this will result in LUNA being valued at $150.
The future of the Terra Luna crypto
Some of the LUNA price predictions seem excessively bullish given what has happened, and its ecosystem is currently going through a tumultuous period.Despite best effortsto future-proof the blockchain, the price crash of the cryptocurrencies has given investors a bleak outlook on Terra’s native coin.
After its mainnet launched in 2019, the network prospered into a bustling ecosystem offering a range of DeFi products, along with a platform for developers to build on. More than 90 apps have been launched on the Terra LUNA network and in early May 2022 it was the second-largest DeFi blockchain by total value locked in (TVL), according to DeFi Llama.However, after the crash, $30bn in TVL was wiped from the blockchain, a loss of over 90%.
However, it appears that Terra Classic is being left for dust. While it seems there is stilla communityrevolving around the original cryptocurrency,the Terra team and developers will most likely focuson thenew instance of the project. The original holders of LUNC will be rewarded with the new tokens, in an attempt to make amends after the price crash meant investors lost out badly.
The cryptocurrency world is a quickly changing landscape, and coins that initially saw success can rapidly become irrelevant. This is proving to be the case with LUNA. With its stablecoin losing its peg and the price of LUNA plummeting in recent weeks, Terra’s new project maystruggle to rebuild its reputation.
FAQs
Is LUNA coin a good investment?
It might be but it may very well not be. LUNA coin was behaving bullishly in 2021 and some analysts predict this trend to resume. However, the token has recently undergone a huge crash, with the cryptocurrency falling out of the top 10 by market cap.
Remember, as LUNA has shown, cryptocurrencies are highly volatile assets and past performance is never a guarantee of future results.Any decision to invest should be based on your attitude to risk, your expertise in this market, the spread of your portfolio and how comfortable you feel about losing money. Never invest more than you can afford to lose.
Will the LUNA coin price go up?
Despite the recent crash, there are some positiveLUNA coin price predictions for 2022.TechNewsLeader thinks it will see a gradual rise and hit $0.006in the next decade.Similarly,DigitalCoinPrice suggests this upward trend will be gradual, but does not expectLUNA to pass $0.01 in the foreseeable future. However, CoinCodex expects the token to continue to fall.
Where to buy LUNA coin
While many major exchanges have delisted the cryptocurrency after the crash, there are some still offering LUNA, including FTX. Just remember to do your research and never invest more than you can afford to lose.
Further reading
LUNA vs TerraUSD: How are they different?
LUNA 2.0 price prediction: A new life for Terra
Kwon’s post-UST rebuild: What is Terra 2.0 (LUNA 2.0)?
What is Terra LUNA: Your ultimate guide
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