The capitalization of Terra (LUNA) cryptocurrency has recently increased by approximately $3 billion, as CoinMarketCap reports, following the recovery of the crypto market and the upcoming Fed decision, which is expected to cause a volatility spike on the market.
As the chart of one of the biggest Ethereum competitors suggests, LUNA is currently moving in a sharp uptrend in contrast to most of the cryptocurrency market. In the last 17 days, LUNA added over 64% to its price while Ethereum lost around 15% in the same period.
Both speculative interest in the token and the fundamental background of the project explains the sharp uptrend on LUNA. The wrapped version of the token that exposes investors on different networks like Ethereum to the token shows that Terra's token seems more pleasurable for investors than similar assets.
Project's fundamental background
Terra is a blockchain protocol that utilizes fiat-pegged stablecoins for their payment ecosystem. It currently offers a whole variety of stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik and others.
LUNA also acts as the governance token for the network, which allows holders to submit votes on governance proposals, which gives it additional functionality and use cases.
Another reason behind the growth of the token could be tied to the increased demand for stablecoins as most investors on the market are actively withdrawing their digital funds from centralized exchanges and putting them in private wallets, or DEXs.