Hope you all are having a nice time in your respective countries? Today I would like it so well if the lesson for today will be an interactive one. I have been thinking of the terra (LUNA) and Terra classic (LUNC. as though I am yet to comprehend what the idea is all about. now join me as we begin.
As we all know, the Luna is said to be the native currency of the great Terra community, and we vividly know that the major product of this Terra ecosystem is what we called TerraUSD generally known as the UST. and the UST was considered to be a currency whose price and value is meant to be stable without fluctuating, and it was invented in 2018 in a lab owned by the Terraform. Terraform is located in South Korea and as such it is a company South Korean, and likewise, this company in question is being managed by a man called Do Kwon.
The major aim and objective of the project are to create what we know as an algorithmic coin that is stable in value and which denotes the fact that the previous LUNA would be burnt every time the UST losses its stated peg to the dollar value and this is done regularly and interchangeably.
So with that, we get to see many UST being minted anytime it loses its pegs to the dollar value and then creates stability regarding its peg with the dollar value. and to get a clear picture of this scenario, if we get to see an increase in the price of LUNA to be $1.02, few LUNA will then be burnt in other to return to the dollar value as though it has been pegged to be in the same value just as the dollar and if we notice a decrease in the price of LUNA to be $0.3, few amounts of UST will be minted in other to increase the value of the LUNA coin to get to the price of the pegged dollar.
Now the above was the aim and objective of the LUNA currency. but that did not work as though we saw that the UST value dropped so bad and the LUNA coin has no choice but to go down the drain with the UST as though it was pegged to the UST, so in a nutshell, when a coin is been pegged to a stable coin, whatsoever that occurs to that stable currency will surely happen to the coin it was been pegged with. so with the image above we can as well see a coin that was at $119.18 is now at $0.00006134.
The previous LUNA coin was said to be recovered through a recovery plan of creating a new coin. and then the previous LUNA is now changed to LUNC (Terra classic) and the new LUNA has taken the name of the previous LUNA, it is now known as Terra LUNA (Luna 2.0). I always wonder, if there were to be a recovery plan, why not work on the previous LUNA coin, but instead they regarded the previous Luna as old and the current Luna as new Luna.
With this scenario, now leave old investors to wonder, what will be their fate as though another currency has been created and also took over the name from the previous Luna. will the previous Luna ever recover? will then get their money back? so these are certain questions investors often ask themselves.
Although the current Luna coin was launched this year on May 28, and again it has been connected to the stable coin known as UST. so when then will happen to the previous Luna. The manager said the previous Luna will still be in existence and as though they will all be in existence. but that is not a solid answer to investors who had their money taken away due to the fall of the previous Luna coin.
The worse of all is that investors often take the risk that does not worth it, on the day the new Luna was launched many people dashed into it just to make profits, and have forgotten the event that just took place regarding the old Luna coin. if you were following, you would notice that the price of the Luna 2.0 was $19.5, and many people dived into it, within a few hours later, the value retraced downward to what we saw as $6,4. now tell me, what has happened to the investors that were the first people to dived into the currency the moment it was launched. they are certainly making losses now.
As we all can see in the above image, the price of the new Luna is now $3.5. eventually anyone that purchase the new Luna when the day it was launched would be making losses now.
The fate of the previous Luna investors can not be altered as though the previous Luna has been forgotten. I am also an investor of the previous Luna. as a spot trader of the previous Luna, I have lost money and hope in it.
Investors are to take note of cryptocurrency before they invest in it. like I said earlier just a few moments after the new Luna was launched, many investors dived into it and purchase it at $19.5, thinking that the price will skyrocket just as the previous Luna did, where we noticed a huge rise in the price as at then, not knowing that the price will drop so bad, and like I said a few hours later, we noticed a massive drop of this coin. this is the power of the market makers preying on small traders.
We all should be vigilant and take note of certain eventualities before keying into something you know not, the intention it has in mind. we look forward to seeing a better world in cryptocurrency. thank you all for going through my content. Greetings!