After a spectacular crash in mid-May, the entire Terra ecosystem imploded. The Terra Luna Classic (LUNC) coin (then Terra (LUNA)) fell from over $100 to a painful $0.00001675 as a result. To counteract the flash crash, those responsible created countless new units of the cryptocurrency, which only made the system even more inflationary. The result: a death spiral that shook the entire crypto market. Damaged investors lost everything. More about this here.
New staking service and transaction tax
But now the cryptocurrency, believed dead, is fighting its way back north. The price rally began in late August when the Terra Station staking platform opened. With an annual return of almost 15 percent, the project has already attracted more than 700,000 wallets. Since then, the price of LUNC has increased massively and is amazingly back among the top 30 cryptocurrencies.
Another price driver is likely to have been the new transaction tax. The so-called Terra Rebels did not introduce the tax update via a governance vote, as is usual in crypto space, but simply made it available. They hoped for the validators, who ultimately voluntarily implemented the change.
From September 20, 1.2 percent of the transfer amount should automatically be burned from every transfer that runs via the Terra Chain from now on. The withdrawn coins are sent to a “dead” wallet. With this, the team wants to continuously reduce the circulation amount of Luna Classic and make the cryptocurrency more deflationary. It is unclear whether the wallet is actually “dead”, i.e. nobody really has access to the blocked LUNC coins.
Be careful when buying crypto
At the time of the collapse, many believed the ecosystem had been destroyed forever. The sell-off was too drastic at the time. Meanwhile, the community is more or less united behind the project and obviously doesn’t want to give up – many of them have invested too much money in Terra.
Above all, the recent hype that has caused the price to skyrocket is dangerous. It can therefore happen that investors withdraw their capital from the cryptocurrency again. An investment in such a volatile asset is therefore well thought out. In addition, buying a cryptocurrency always requires precise research. When in doubt, the following applies in crypto space: do your own research!
Do you want to buy cryptocurrencies?
Trade the most popular cryptocurrencies like Bitcoin and Ethereum with leverage on Plus500, the leading CFD trading platform (77 percent of retail accounts lose money with the provider).
To the provider