Terra is Seeing a Green Flag! Crypto Exchanges are Giving it One More Chance

Terra
Terra

Crypto exchanges are supporting Terra Foundation to reinstate itself in the market

Terra and TerraUSD, the primary tokens that support the Terra ecosystem went down in flames taking more than 95% of the investors’ wealth. TerraUSD stablecoin plunged below 26 cents and failed to maintain peg on the US dollar. Its sister token LUNA, which was one of the top ten cryptocurrencies in the market, traded above US$100 which came down along with it. UST acted as a shock observer for LUNA, but it went down, it brought down Terra LUNA and the entire crypto ecosystem with it. The coin lost roughly around 96% of its value within a period of one week. Besides, Terra, other critical cryptocurrencies like Bitcoin and Ethereum also experienced wild swings over the past couple of days. The wild market movements of these crypto coins spread fear and panic among the investors. The extreme decline in the Terra price caused several crypto exchanges to de-list Terra from their exchanges. But suddenly as Do Kwon’s proposal to re-launch got accepted, crypto exchanges started showing initial support to the endeavors giving a slither of hope to its investors.

Initially, when Terra fell, crypto exchanges de-listed the crypto in order to protect users from risk. Binance, one of the largest cryptocurrency exchanges in the world, by trading volume, halted LUNA and Terra trading, followed by the OKX exchange. Other small-scale exchanges like FTX exchange and others followed suit. It is quite evident that the delistings were in response to the broader collapse of the Terra economy. Experts mainly believe that UST fell mainly due to its ‘algorithmic’ stablecoin nature. Algorithmic stablecoins use a complex system of minting and burning tokens to adjust the coin’s supply and stabilize its price. TerraUSD’s price also declined due to the pressurizing sell-off of the other cryptocurrencies.

Crypto Exchanges are Giving One More Chance to Terra

Since Terra fell and wiped off most of its value, its creator and CEO of the TerraForms Labs, Do Kwon has made several efforts to return UST to its US$1 peg. He even tried to increase the rate with which a new LUNA is minted per day, to support the destabilizing framework. The venture would have let the supply of the stablecoins reduce and boost LUNA’s price. But several of Kwon’s initiatives have failed to please others. The fact that he had been accused by the South Korean Government of fraud and other violations of financial regulations also aided in the declining value of the cryptocurrencies.

Investors had wished for a new capital injection to boost the value of the project. Supporters of the TerraUSD were apparently seeking to raise more than US$1 billion in funding to pop back the stablecoin. The Terra Founder garnered billions of dollars’ worth of Bitcoin tokens through his Luna Foundation Guard fund to support the falling UST value. Finally, after several attempts, Kwon has finally managed to get everyone on board to relaunch the Terra blockchain.

Would Terra regain back its lost value?

Algorithmic stablecoins are still a new subject. Hence, the firm needs as much support from experts as it can get. Recently, Binance announced that the exchanges’ experts were working closely with the Terra team on its recovery plan and helping the platform users who were affected by the crypto’s fall. Meanwhile, Coinbase announced that it would delist Wrapped LUNA and all other potential Terra chains in the future. Keeping these incidences in mind, it is quite hard to predict if Terra will regain back its lost value, anytime soon, but it is true for sure that Terra needs time to pull through.

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