Terra sees a monthly burn of $185 million worth of LUNA tokens
- Terra ecosystem’s token, LUNA, meant to help stabilize the project’s stablecoins, recently skyrocketed.
- LUNA price surged due to a massive amount of tokens being burned as TerraUSD started seeing more use.
- The project has already had a lot of development, and even more is expected to happen in weeks to come.
LUNA, the native cryptocurrency of a project called Terra, recently saw a nearly 80% price surge over the course of the last week. The protocol, created by a team of developers from South Korea, even managed to surpass another leading project, Polygon (MATIC/USD), formerly known as Matic Network. In doing so, Terra became the third-largest DeFi project according to total value locked (TVL).
LUNA, as some may already know is a part of an algorithmic balancing system that is actually used to help stablecoins launched on the same protocol stabilize their prices. Yesterday, the token managed to hit the price of $33.39, which is its brand-new all-time high. The project provides an incentive for trading LUNA for Terra stablecoins whenever there is a need to increase or reduce the supply of the stablecoins.
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LUNA saw a major surge over the past month, going up by a total of 460%. Its TVL climbed up to $6.21 billion, making Terra the third-largest blockchain, bested only by the two industry leaders, Ethereum and BSC.
Terra sees massive amounts of positive developments
A lot led to this major surge, including LUNA’s numerous listings on major exchanges, including Coinbase Pro, which listed both, Ethereum’s version of the token called Wrapped Luna (WLUNA), as well as Terra’s stablecoin, TerraUSD. Then, there was the recent launch of a bridge protocol called Wormhole, which connected Solana (SOL/USD) to other blockchains, Terra included.
This particular move was meant to enable tokenized assets, and allow NFTs to move more easily between different chains. The idea, as well as the bridge itself, saw great popularity and received a tremendous amount of attention. On top of that, there was the ability to use Ethereum as collateral on the Anchor protocol — Terra’s own lending and saving platform.
Thanks to its connection to TerraUSD, the more demand the stablecoin sees, the more LUNA tokens get burned. This reduces the circulating supply of LUNA, and results in its price going up, which is exactly what happened here.
The project is expected to see even more activity in the coming weeks, as it is about to roll out a new upgrade known as Columbus-5, which will be followed by numerous new projects scheduled to go live on Terra.