Terra’s LUNA surges 80% in a week, overtaking Shiba Inu and Dogecoin

Terraform Labs’ LUNA is becoming rapidly one of the crypto market’s best performers, having gained around 80% in value in the last week, upping bigger than either Shiba Inu or Avalanche. An upcoming network upgrade has driven its surge. In addition, JPMorgan’s expert said that terra’s stablecoin mechanism is suitable for cross-border payments.

The gains have come thanks to a combination of a falling supply of tokens, and a series of changes in how the coin is used in its own payment network, The Insider reports.

LUNA’s even overtaken Dogecoin-darling Shiba Inu and “Ethereum killer” Avalanche’s AVAX to become the 11th biggest cryptocurrency by market value, according to data from CoinMarketCap.

The Terra blockchain launched in January 2018 and uses fiat-pegged stablecoins to run its payments system. Its native LUNA token is then used to stabilize the price of the protocol’s algorithmically-backed TerraUSD stablecoin, UST. In addition, according to its whitepaper, LUNA holders can submit and vote on governance proposals of their own.

(Source: Tradingview )

This week, investors voted to allow community funding for an overhaul of the network’s “TrackTerra” tax and reporting app. According to a tweet from developer Terra, that will enable LUNA holders to export transactions to different tax software programs.

The US government is tightening the rules around tax liabilities stemming from cryptocurrency transactions. This was one of the catalysts that knocked Bitcoin, Ether, and other major coins lower in November when Joe Biden’s infrastructure bill — which includes regulations for crypto — passed into law.

LUNA has been one of the strongest-performing major cryptocurrencies over the last seven days, much to the enthusiasm of its “LUNAtic” community of supporters. The price was up 7.2% at $67.83 in the 24 hours to 06:45 a.m. ET on Friday, bringing its market capitalization above $26 billion. Earlier in the day, it hit a record $70.46 on the Binance exchange.

(Source: DeFillama )

Its network rolled out a major upgrade last month, aimed at better maintaining the peg of the TerraUSD to its fiat value. In turn, that resulted in over 93 million LUNA tokens being “burned,” effectively vanishing from circulation, according to FX Leaders analyst Aiswarya Gopan.

Part of LUNA’s popularity is coming from the rapid evolution of decentralized finance. Along with competitors such as Avalanche and Solana, Terra has been gobbling up market share from leading DeFi blockchain Ethereum, thanks to its faster transaction speed and lower “gas” fees.

“Terra is a stablecoin-issuing platform using a mechanism that minimizes volatility to achieve close peg of the issued stablecoins to fiat currencies,” said JPMorgan currency strategist Nikolaos Panigirtzoglou, noting Terra’s advantages relative to some rival protocols in a recent research note. “This mechanism, operating via dynamic expansion and contraction of token supply, issues several regional stablecoins that can be swapped, making the Terra platform particularly suitable for cross-border payments.”

Terra has a large community base and is one of the most active in the crypto space. The community of the Terra ecosystem refers to themselves as “LUNAtics.”

Members are additionally made to feel intrinsically part of the project through community calls and via governance of the project through staking.

LUNAtics hold a very bullish stance on the future of Terra (LUNA). Crypto analyst, @cryptomanran, shared why Terra could become a top 5 crypto, writing:

“LUNA will be top 5, here’s why: 1. Insane Tokenomics (Luna/Terra burn). 2. Great tech. 3. Decentralized web 3 money narrative. 4. Charismatic/genius figurehead! 5. Strong community- increasing momentum. 6. Best VC support-all made insane returns. 7. Lots of high caliber complex Projects.”

GMI Analyst, Remi Teto, wrote the following about the Terra project:

“Remember that LUNA is only a tool in Terra ecosystem, sure it will generate wealth for Hodlers, but the success of the ecosystem will happen once UST is the reference stablecoin on multichains. Terra is leading the way in creating a truly decentralized economy.”