- Since its initial crash, LUNA has made a comeback rallying by over 300 percent in the last weekend.
- Despite the backlash from the crypto community, Terraform Labs has received backing from some of the largest exchanges including Binance, KuCoin, and Poloniex.
After staying in the cold for close to five months, LUNA, the native token for the Terra ecosystem made a strong comeback last week despite the crypto market yielding under ongoing macroeconomic concerns. On Friday, LUNA which trades on some exchanges under the ticker “LUNA2” breached the $2.15 resistance and spiked roughly 307 percent to tap $7.65.
The move comes after the top-rated cryptocurrency plunged over 99 percent following the Terra stablecoin “UST” de-peg from its one-dollar mark in May. What followed was a chain reaction with major stablecoins including Tethers USDT and Circle’s USDC losing their USD peg leading to a DeFi liquidity crisis and a deeper plunge by the crypto market.
However, since Terra’s implosion, the Terra ecosystem has been trying to bounce back, stoking the interest of investors and exchanges. Following the implosion, Terraforms Labs, the firm behind the Terra project split the old chain into Terra Classic (LUNC)and LUNA 2.0(LUNA2/LUNA) promising to airdrop affected holders of LUNC, USTC and Anchor Protocol UST (aUST) with new tokens.
Terraform Labs also received backing from top exchanges such as Binance, KuCoin, Poloniex, Gate.io, and FTX among others through listings despite facing backlash from the crypto community. In the lead-up to LUNA’s pump on Friday, LUNC had also surged by over 500 percent between August 20 and September 7.
The recent pump has been attributed to a lot of developments happening inside the Terra ecosystem. About two weeks ago Terra passed a proposal to conduct its second LUNA airdrop until October 4. Before Friday’s pump, the community passed a proposal to implement a 1.2 percent token burn tax on LUNC. The proposal, which will see all on-chain transactions on LUNC “taxed” through a burn mechanism, has received a lot of support from major CEXes and is expected to reduce the supply of the token which is theoretically good for the price.
“One of the primary goals of the burn implementation and execution is a signaling to the exchanges that the core governance community can and will execute a tax and burn, and desire the same to happen on the CEX.” Luna Classic core developer Edward Kim said in a recent note.
That said, despite the huge gains, the terra ecosystem continues to face accusations of price manipulation and whales looking for exit liquidity given two tokens are now at play. On Friday, some tweeps were quick to point out the glaring spike in LUNA immediately LUNC stopped pumping.
Self-proclaimed crypto sleuth “FatMan” also flagged a suspicious transaction involving 435,000LUNA2 tokens allegedly sent to Binance by TerraForm labs, eliciting mixed comments by the community. Do Kown, founder of TerraForm labs however refuted those claims.
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