Terra LUNA at Around $0.00029 - Don't Let Your Greed Take Over, Stay Away.
The Zimbabwean dollar could be considered as hard money against Terra Luna ...
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A few days after the LUNA Sh*tcoin explosion, many are wondering if it’s time to buy LUNA today. I’ll tell you why many people are asking this question today.
It’s all about greed.
You see LUNA hit an ATH of $119 in early April 2022. April 5, 2022, to be exact:
Today you see LUNA at $0.00029972.
What do you think?
What if LUNA managed to recover even a tenth of its ATH price. Then the price would be $11.9. If you buy LUNA today and its price reaches $11.9, then you would make a capital gain of +4,000,000%.
$1 invested would be turned into $40K.
Pretty interesting I’ll give you that.
And since you only see your short-term profit and greed blind you, you forget what happened recently. You forget how the weaknesses of the Terra ecosystem have been exposed but mostly exploited to see this huge drop in LUNA and UST.
UST is a stablecoin that is currently worth $0.20… Pretty problematic for a stablecoin to fail to stay pegged to the US dollar as it is supposed to!
The UST is probably a sign of failure for algorithmic stablecoins.
In an attempt to save the day, and also the UST soldier, Do Kwon has been issuing countless LUNA in the last few days to the point that the Zimbabwean dollar could be considered hard money … That’s how terrifying the LUNA inflation has been!
The supply of LUNA has exploded exponentially in the last few days:
The supply went from 345M to 6,531B of outstanding LUNA in a matter of hours. It is no wonder the price has dropped so much.
With such a large supply in circulation today, a LUNA at $1 would mean that the market cap is $6,531B … As a reminder, the market cap of Bitcoin today is $565B. So Terra would have to have a market cap more than ten times that of Bitcoin for LUNA to be at $1 in the current supply configuration.
This is impossible.
Furthermore, as soon as LUNA goes up, you can be sure that traders will scalp it to bring it down after taking their profits. They can repeat this kind of trade several times.
Terra’s founder, Do Kwon, presented a recovery plan for LUNA. According to him, Terra’s community must reconstitute the chain and validators should reset the network to 1 billion tokens which would be distributed this way:
400 million units of the token should be given to previous holders of the LUNA who saw the values of their coin depreciate badly.
400 million units should be given to UST holders on a pro-rata basis.
The last 200 million units should be divided between the community pool which would be used to fund future projects and those who bought LUNA at the last minute in their attempt to help save the coin, equally.
Kwon advised that the community should attempt to “incentivize its security with a reasonable inflation rate, say 7%, as fees will no longer be enough to pay for security without the swap fees”.
It is not clear that this will be enough to restore the confidence needed to get the Terra ecosystem off the ground again. Once a scam has been exposed, it seems illusory to hope that it can take off again.
Under the current conditions, it’s all a blur, so it’s best to stay away in my opinion.
While the CEO of Binance asked Do Kwon to prove that he had the BTC he bought in the last few weeks to guarantee the Terra ecosystem, the LFG has just made a transfer of 80,394 Bitcoin from its reserve to Gemini and Binance.
A good way to prove that the scam was not that huge. For many, this will not be enough. And we understand why. How many people who believed in this project have seen their hopes reduced to ashes in recent days. The stories are multiplying. Some are dramatic. Some went from millionaires to nothing in a few hours. Hard to take.
But the hardest and cruelest lessons are learned in the world of cryptocurrencies.
The consequences of the LUNA / UST case will certainly be enormous. The US authorities will take a close interest in this story and will push for strict regulation of stablecoins. US SEC Commissioner Hester Peirce says stablecoins are likely to be regulated in light of Terra’s UST crash.
That won’t be a bad thing.
We also expect Yanet Jellen on the subject in the coming days. Or Elizabeth Warren and other opponents of crypto-currencies who are sure to have a field day. Bitcoin will likely be associated with this slump, while the king of cryptocurrencies is a species apart that has once again shown its resilience in the current chaos.
As for the rest, seeing the rather impressive list of Venture Capitalists who have put millions of dollars into the Terra ecosystem … One can only wonder.
Will they withdraw their support and leave? Or will they try to save what’s left of LUNA? Can anything still be saved?
We’ll find out in the next few weeks, but for the time being, you should be very careful and STAY AWAY from LUNA. The probability of Terra disappearing is greater than that of an extraordinary revival. The important thing, in my opinion, is that the community learns the right lessons so that this type of episode does not happen again.
Let’s hope that the investors blinded by their greed will open their eyes and be more critical in the future. We can always dream …
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