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$2.7 Billion Worth of LUNA Tokens Burned So Far in December as UST Demand Increases

Mon, 12/27/2021 - 11:56
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Tomiwabold Olajide
UST demand rises with 27 million LUNA tokens burned so far in December
$2.7 Billion Worth of LUNA Tokens Burned So Far in December as UST Demand Increases
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According to Terra Analytics, nearly $2.7 billion worth, or 27 million, LUNA tokens have been burned so far in December as UST demand spikes. LUNA marked all-time highs of $104 on Dec. 27 before a slight retreat. At press time, LUNA was changing hands at $98.68, up 26% on a seven-day basis, according to CoinGecko data.

As seen on Terra Analytics, the supply reduction at the start of December was 94,243,648. The difference from the present supply reduction marks nearly 27 million.

Currently, 102.71 million LUNA tokens have been burned since the Columbus-5 upgrade went into effect at the end of September. Aside from interoperability, the Columbus-5 upgrade introduced a new mechanism for keeping stablecoins pegged to their fiat value: anytime UST is created, the equivalent quantity of LUNA is burned.

This gives a direct correlation between the two assets so that "As UST demand goes up, LUNA's price also goes up."

LUNA, the native asset of Terra blockchain, has surged in value and is up 18,134.1% for the year, as per CoinGecko. Terra ranks the ninth-largest cryptocurrency by market capitalization.

Terra UST flips DAI to achieve $10 billion market capitalization

Co-founder and CEO of Terraform Labs, Do Kwon, shared the news of Terra's UST reaching $10 billion in market capitalization, being the first decentralized stablecoin to do so. Upon reaching this milestone, UST flips MakerDao's DAI market capitalization of $9.3 billion.

TerraUSD (UST) is a one-of-a-kind algorithmic stablecoin in which coins are burned or minted to keep the coin's value in line with the desired price. The algorithm will automatically burn a batch of coins to increase scarcity and, thus, raise the UST price.

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About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.