The Fall of Luna Coins
The Sad Reality of Cryptocurrency
The fall of the Luna coins started when it was rumored that the founder Do Kwon had parted away with billions of dollars of investors' funds in a secret wallet on the Terra blockchain. This is caused due to a lot of whales selling off their investments, which eventually leads to a sharp fall in price from $100 to a couple of cents. However, during the dip, a lot of people have become millionaires simply by scalping the Luna coins movement.
The price of the then-$18-billion algorithmic stablecoin Terra USD (UST), which is designed to keep a $1 peg, began to sway on May 7 and plummeted to 35 cents on May 9. Its partner token, Luna, which was supposed to make stable the price of UST, dropped from $80 to a few cents by May 12. The price of the then-$18-billion algorithmic stablecoin Terra USD (UST), which is designed to keep a $1 peg, began to sway on May 7 and plummeted to 35 cents on May 9. Its partner token, Luna, which was intended to sustain the price of UST, dropped from $80 to a few cents by May 12.
After the fall of Luna 1.0. its founder Do Kwon founded a new project and renamed the old coin Luna classic. This is a lesson to take from the volatility of cryptocurrency, as a tweet that contains bad news about the market could create a bull or bear run depending on the movement of such news.
Luna classic is also pegged to its stable coin USTC which is also an erroneous proposal not so thought well by the Luna coin developers during development as it is clear that destabilization in USTC would lead to the fall of Luna.
The decentralization of cryptocurrency.
A lot of people are of the opinion that cryptocurrency in general is decentralized due to a lot of market manipulations by various social media personalities. The true definition of decentralization should be an uncontrolled parallel market, where individuals buy and sell cryptocurrencies without any external influence be it developers, government, or literally a coin managed and owned by the community. However, what is seen today is far-fetched from the ideal.
The spin-off of Luna 2.0
Despite a lot of community effort to backtrack the older Luna classic coin by implementing a burning policy after its initial crash, was trashed out on the terra voting station with a lot of "No with veto" going against the burn mechanism. This definitely confirms that there are certain whales in the cryptocurrency ecosystem, who would get hurt from fees taxed from trading fees by the Luna community. If Luna was to be burnt, according to the calculation of its circulating supply the coin could recover its initial value at 100$. The second burn mechanism proposal was also passed, however, there is no news yet, on whether a burn mechanism would take place or not.
Will Luna rise again?
Yes, the possibility of Luna rising again is great as opposed to the pessimistic view. It is clear that a lot of people lost money through Luna, which is very sad. Luna can only pick up the run again if the burn mechanisms are implemented and a lot of projects continue to build on Luna 2.0.
Here is the May 2022 timeline for Luna
According to the CoinDesk, here is the timeline of events that lead to the fall of Luna coins:
May 7: There was a massive movement of investment, Curve Whale, a Twitter bot that watches a massive movement of investment, saw 18$ billion being moved from the blockchain.
May 8: There was an all-time low of $0.985 USTC
May 8: LFG loans 750 million dollars to BTC makers, and another 750 million when BTC subdues
You can read more here on CoinDesk: