Indian Exchanges Delist LUNA After A 100% Crash In The Token
Luna, which was trading around the $80 level till last Saturday, was trading at the $0.00002446 level this afternoon, displaying a fall of nearly 100% in its value. Meanwhile, the token’s market capitalization decreased from around $30 billion to around $6 million.
On Friday morning, WazirX, one of India’s biggest crypto platforms in terms of trading volume, said it would delist Luna/USDT, Luna/INR, and Luna/WRX pairs. They added that they would allow Binance free transfer for users to withdraw their Luna funds. WRX is WazirX’s utility token, and USDT is the stablecoin tether.
After WazirX’s parent Binance announced that it would delist Luna/USDT contracts as the price dropped below the $0.005 level.
CoinDCX, another crypto exchange, said it was delisting UST and Luna from the CoinDCX app immediately. TerraUSD, or UST, an algorithmic stablecoin, is a sister token of Luna.
CoinDCX, India’s highest-valued crypto exchange, said that the users could continue to trade the above assets using other trading pairs available on CoinDCX Pro and CoinDCX Web Platform.
On Thursday, the Terra blockchain was stopped after its token terra (Luna) value decreased to below 2 cents, even though trading at about $80 in the last week.
Luna’s downfall began over the weekend when its sister token, UST, a stablecoin, broke down from its $1 value after big investors started throwing away millions of dollars worth of UST.
A stablecoin is generally linked to an underlying asset such as the US dollar or a valuable metal such as gold. While TerraUSD is a decentralized algorithmic stablecoin which means rather than being backed by an asset, UST uses multifaceted codes to create new coins or destroy old ones to maintain a steady price at $1.
All stablecoins have a governance token that helps them provide stability. In the case of UST, Luna clarifies the correlation between both tokens.
Nonetheless, due to the recent drop in the overall crypto market, UST was unsuccessful in stabilizing and hit a low of $ 0.0449 on Friday morning. Terra creators have attempted to stabilize the token but have failed.
Since last Saturday, UST’s market capitalization has dropped from over $18 billion to less than $2 billion.
Charles Tan, the chief marketing officer at Atato and a licensed Multi-Party Computation (MPC) crypto custodian wallet, said that the present Luna fiasco is a learning opportunity for the crypto community worldwide and has revealed the weak links within the algorithm-based stablecoin ecosystem. It is significant to note that Terra network is one of the most tech-savvy in the crypto industry, and Terra UST is a creator in the algo-based stablecoin race. The LUNA crisis repeats that crypto as an asset is highly volatile and that investors need to be cautious while trading with a long-term horizon of 2-3 years to stay profitable.