These days, the general crypto market seems to be slowly recovering from its recent downtrend. However, this doesn’t seem to be the case for Terra’s native token, LUNA. The LUNA crypto asset is once again down by another 12%, with its value going under $44. Meanwhile, its weekly losses have increased by 35%. LUNA’s value has nosedived by over 50% for the past month.
Although the other altcoins within the top ten ranks have been steadily stabilizing, Terra continues to free-fall. There have been some negative reactions and comments about Terra in the past because of the ecosystem’s association with Magic Internet Money (MIM.) Not only that, the blockchain’s partner Abracadabra protocol is closely linked with Wonderland.
The Abracadabra protocol takes UST and deposits them in exchange for MIM. Then, it uses the converted funds to further stake on Wonderland, ultimately accumulating a profit of 12000% APY. According to Colin Wu, a renowned crypto-journalist:
Will LUNA Ever Recover?
At this time, we can’t say for certain how Terra’s LUNA will do in the weeks ahead. The community is buzzing about how Terra is associated with the Anchor Protocol, which is responsible for inducing the highest possible demand for the UST stablecoin.
For those who are unfamiliar with the Anchor Protocol, it’s something where you can earn and borrow $UST by using crypto like $ETH and $LUNA as collateral. Crypto analyst Jarzombek explains the situation more in detail in a recent Twitter thread.
https://twitter.com/jarzoombek/status/1486698407561510919?s=20&t=oyuXKvTtCU_-eKxplisw_A
It’s also worth noting that the protocol has recently taken some corrective measures. On Saturday, Anchor announced that it would increase its bLUNA TV’s value to 80%. The announcement said:
