Individual market participants’ warnings of a coming ‘crypto winter’ have yet to subside as one promising network has moved to seventh place by market capitalisation, and its token is on the cusp of setting a new all-time high (ATH). The coin? LUNA (Terra).

LUNA is the native coin of the Terra project. It has a floating exchange rate and is algorithmically linked to the network’s stablecoins, such as UST. If demand for stablecoins increases, LUNA validators receive an additional reward. With a drop in demand and excess coins, the system burns part of them. Algorithmic stablecoins are seeing increased interest in them since their issuance is not tied to the issuer’s whim. In other words, more of them can’t be ‘printed’ to extract more profit.

LUNA’s drop in value during the winter was due to the crypto market’s overall correction as well as with problems with one of the project’s partners, Daniele Sestagalli. In January, the public became aware that Sestagalli had hired Michael Patryn (aka Omar Dhanani), who had been repeatedly convicted of fraud, as Wonderland’s financial manager. We discussed the scandal in detail in an article. Because UST was indirectly affiliated with Wonderland, it was also sold off and stress-tested.

LUNA’s current growth is due to both confirmation of the network’s resilience and increased interest in the Anchor DeFi platform. Anchor is built on the Terra blockchain and offers passive income for staking stablecoins. Over the past six months, Anchor’s total value locked (TVL) by users has risen from $2.5 billion to $11.7 billion, propelling Terra into second place in the overall DeFi standings this year, behind only Ethereum.

In terms of total market capitalisation, Terra has risen to seventh place this year, threatening to overtake Ripple in the coming days. In addition, UST holds first place among algorithmic stablecoins, with a market capitalisation of $13.4 billion.

Ripple and Terra both have the same goal: both projects aim to become the key link between fiat and cryptocurrencies. The primary difference between the two is that Ripple is a centralised network burdened by complaints from US regulators. Terra, on the other hand, is a decentralised blockchain protocol with algorithmic stablecoins.

StormGain analytic group 

(platform for trading, exchanging and storing cryptocurrency)