LUNA Skyrockets 20% Amid Rise in DeFi, Staking on Terra
Terra's native token LUNA has risen 20% overnight as the crypto network attracts more DeFi users and enjoys a rise in staking activity.
LUNA, the native token behind fast-growing crypto network Terra, is up over 20% in the past 24 hours.
The cryptocurrency is currently trading hands at $98.41, a significant feat given that it was trading at roughly $77 on Monday. The current price also puts LUNA within just 5% of its all-time high of $103.34, seen last December.
Terra is a crypto network built using the Cosmossoftware development kit (SDK). The project has attracted significant attention of late due to the steady rise of its native U.S dollar-based stablecoin, UST. Terra’s other token, LUNA, serves as a staking and governance token, letting users vote and make proposals about how the protocol should be improved.
Both tokens are also deeply interconnected too.
Each time $1 worth of UST is minted, an equivalent amount of LUNA is destroyed. The opposite is also true: In order to create $1 worth of LUNA, users must destroy $1 of UST. This mechanism helps keep UST pegged to the dollar, for whenever it falls below its peg, market participants are incentivized to swap the discounted UST for LUNA. This destroys UST, reduces supply, and, theoretically, pushes the value of UST back to $1.
So far, it's working too.
DeFi and staking on Terra
UST is the crypto market’s largest decentralized stablecoin (meaning it’s not backed by a singular entity nor can its reserves be easily blacklisted or frozen) and the fourth-largest stablecoin overall.
The largest stablecoins are Tether (USDT) and USD Coin (USDC), each of which commands a market cap of $80 billion and $52 billion, respectively. ( source : Decrypt.co )