Terra’s native cryptocurrency LUNA has witnessed a strong rally despite the market volatility in recent times. The LUNA crypto is aiming a move to its new all-time high and is currently trading 7.5% up at a price of $95.36 with a market cap of $35.7 billion.
With the recent move, Terra’s LUNA becomes the second-largest Proof-of-Stake (PoS) network by staking rewards toppling giants like Ethereum 2.0, as per the latest data from staking rewards.
— Staking Rewards (@StakingRewards) March 1, 2022
Terra’s LUNA has emerged as a strong competitor to Ethereum with growing demand among DeFi protocols. However, Terra LUNA remains second after Ethereum in terms of the total value locked (TVL) which currently stands at $23.7 billion.
Over the last week, LUNA has registered the highest gains at 77% among all the top ten cryptocurrencies. It is now the seventh-largest cryptocurrency by market cap toppling giants like Solana (SOL), Cardano (ADA), and Avalanche (AVAX).
So Why’s LUNA Price Rising so Much?
Last week, the Luna foundation Guard (LFG) announced an over-the-counter sale of the LUNA cryptocurrency. The Luna foundation said that this fund will go towards “establishing a Bitcoin-denominated Forex Reserve for UST”. Explaining this move, LFG said:
Although the widespread adoption of UST as a consistently stable asset through market volatility should already refute this, a decentralized Reserve can provide an additional avenue to maintain the peg in contractionary cycles that reduces the reflexivity of the system.
Furthermore, Terra is all set to eat into Ethereum’s DeFi market cap. The Terra ecosystem currently hosts 13 DeFi protocols within such a short period of time. A large number of DeFi protocols are set to enter the Terra ecosystem ahead this year. Besides, the burning mechanism of Terra’s native stablecoin UST also supports the surge in LUNA’s price.
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