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These Catalyst Will Take Terra (LUNA) Price To New ATH In Coming Days

Written by: Delma Wilson

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Delma Wilson

Delma is a B2B Content Marketer, Consultant, Blogger in the field of Blockchain, and Cryptocurrency. In her spare time, she loves to blog, play badminton and watch out ted talks. She likes pets and shares her free time with NGO.

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Mar 16, 2022

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Terra (LUNA) appears to have been on most people’s radar for a time, with a current market rank of #7 and a market valuation of $29,169,713,864. LUNA’s price, on the other hand, is continuing to decline this year.

Most analysts disagree as to whether this is a reversal or the beginning of Terra’s demise. While it is unlikely that the cryptocurrency will continue to decrease throughout the year.

Catalysts that pushed LUNA to ATH

The catalysts that propelled Ethereum (ETH) competitor Terra (LUNA) to new all-time highs have been revealed by crypto intelligence firm IntoTheBlock. 

Terra’s economic framework, according to the crypto analytics firm, has supported the climb of LUNA during periods of market instability. 

It lists the following factors as key catalysts. 

  1. A $1 billion fundraise from the Luna Foundation Guard (LFG) to build Bitcoin reserves to support UST – the Terra ecosystem’s stablecoin – peg to the dollar
  2. LFG replenishing the Anchor protocol’s yield reserve with $450 million, used to provide depositors with a rate of 19.5% on UST
  3. Increased demand for UST (mostly to obtain these high rates) has resulted in a vast amount of LUNA being burnt, effectively reducing its supply.”

Terra’s massive development, according to IntoTheBlock, may not be sustainable without a few essential improvements.

It explains that the anchor has been able to keep UST yields near 20% by charging high borrowing rates (about 13% at the moment) and subsidizing the rest with the yield reserve, which they recently increased.

A few governance proposals have also been proposed to make these yields more sustainable:

Rates for large depositors are being limited, with reduced yields for deposits of $100,000 and $500,000.

Implementation of a voting-escrowed has’ tokenomics for Anchor, in which depositors must lock their ANC tokens for veANC in order to increase their yield to 20% APR.

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Delma Wilson

Delma is a B2B Content Marketer, Consultant, Blogger in the field of Blockchain, and Cryptocurrency. In her spare time, she loves to blog, play badminton and watch out ted talks. She likes pets and shares her free time with NGO.

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