2022-6-3 17:28 |
The original Terra Chain has been renamed Terra Classic (LUNC), and Terra has been relaunched as Terra 2.0 (LUNA). This happened after developers behind the defunct stablecoin TerraUSD decided last week to abandon the token to develop a new blockchain and digital asset.
Meanwhile, Tim Frost, founder and CEO of the Yield app, shared some fascinating remarks with Invezz to shed light on the cryptocurrency industry’s enigma, given the fragile circumstances surrounding it.
He believes that the success of Terra Luna’s new token, LUNA, is evidence of the ever-present risk appetite in the cryptocurrency market. The new LUNA is derived from a project that caused one of the worst, if not THE worst, crypto market crash in history, and yet investors did not seem to be discouraged.
According to CoinMarketCap, The new LUNA set an all-time high of $19.54 on its debut on May 28. It has now decreased to $6.41, much less than its previous value. However, it is still far more than LUNC’s current price of $0.00010 per token.
Meanwhile, during the last couple of weeks, roughly $80 billion has been wiped off DeFi’s Total Value Locked (TVL) due to LUNA and UST fiasco, but the increased interest in the new protocol indicates that the bull market still has some life left in it.
Frost further added that many investors and traders are preparing for what could be fatal circumstances across all markets over the next six to twelve months, as soaring inflation and monetary tightening might signal a new global recession.
Meanwhile, LUNA’s performance demonstrates that a subset of crypto investors are still prepared to go all-in on altcoin for a quick profit.
Even seasoned investors may do well in the current environment to adhere to tried-and-true assets, such as DAI, the first algorithmic stable currency, which has performed very well since the demise of UST.
Frost emphasised that DAI, the fourth largest stablecoin by market cap, continues to withstand the storm, contrary to what Do Kwon, the creator of Terra Luna, had said publicly about DAI.
At the time of writing, the TVL of Maker DAO’s parent protocol remains well around $14.52 billion, making it the largest DeFi platform today based on TVL, while DAI’s market value of $6.4 billion places it as the sixteenth largest cryptocurrency globally to date.
Frost noted that many claims that, when it comes to stablecoins, USDC is your safest pick owing to its comprehensive and demonstrated audit.
However, as Vitalik Buterin mentioned, DAI had weathered tough times, like “Black Thursday” in March 2020, when a massive run on DAI caused Maker to adopt extraordinary measures, which eventually succeeded despite the MKR token falling by 60%.
In times like these, it is prudent to depend on such tried-and-true assets for those who cannot afford to lose large sums of money.
Safety and capital sufficiency issues will not prevent the most seasoned investors and possibly risk-hungry new traders, from snatching gains on Luna and other currencies. There is a place in the cryptocurrency market for every sort of investor, but only the most experienced should be risk-taking at this time.
The post Tim Frost believes LUNA pump shows fighting spirit of investors appeared first on Invezz.
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