What Pushes Terra (LUNA) to New Peaks
Terra (LUNA) extended the growth of DeFi tokens, touching peak levels above $64. The asset traded at $63.29, up 11% in the past 24 hours as it continued the rally from the past few days. A year ago, LUNA traded around $0.50 and was just starting out to build its ecosystem.
LUNA has established itself as an asset often going against the market trend. The new all-time highs happen as large cap coins stagnate. Bitcoin (BTC) returned to the $57,000 range, while Ethereum (ETH) slid from its hike to $4,700 and hovered around $4,500.
LUNA May Establish Gaming Economy
The Terra blockchain was one of the few successful projects to introduce algorithmic stablecoins successfully. The increasing usage of UST means more LUNA is burned to keep the $1 price and the correct ratio of collateral to the value of UST minted.
While UST is less widely used compared to another algorithmic stablecoin, DAI, its adoption is growing. UST is becoming a go-to asset for DeFi, for a more intuitive valuation and less volatility.
The supply of UST still barely registers among older dollar-tied coins like Tether (USDT), Binance USD (BUSD) and USDC. However, the data on UST show there are actually about 7B tokens in circulation.
UST is an algorithmic coin and its supply may not be reflected in all statistics. UST has the goal of being decentralized and offer access to DeFi ecosystems.
Terra also builds TerraKRW, a similar asset tied to the value of the Korean won. The project has appealed to the South Korean community and may continue to serve as a platform for DeFi and gamified earnings.
Is LUNA Accessible
LUNA is still mostly reliant on trading from international locations, with support from Southeast Asia. The asset is active on the Binance exchange, and is available for swapping through simpler services like Changelly.
LUNA is also available through one of the most easily accessible browser extension wallets, and some of its assets can be bridged to Ethereum and Binance Smart Chain.
The purpose of LUNA is, at its center, to serve as a staking and voting mechanism, but also to be burned for UST creation. Direct access to UST is also possible.
How High Can LUNA Go
For now, LUNA lags behind Solana (SOL) in market price. Most new assets that made fresh all-time highs in 2021 belong to a new class of projects aiming to build real economic interaction. SOL, LUNA and other platforms are no longer aiming to be “Ethereum killers”, but instead attempt to cooperate with the growing value locked in ETH.
LUNA has defied the market multiple times, and there are some expectations the price may follow the trajectory of SOL.
The asset is expected to gain ground in the coming months, possibly joining top coins as one of the most prominent projects. The hype on Web3 projects and play to earn games may add attention to LUNA. For now, the asset has not received a Coinbase listing and has lagged in popularity and fund inflows.
The most bullish predictions envision LUNA taking an even bigger year-end breakout, to levels above $200. LUNA has a relatively high liquidity score of 768 points on its Binance trading pair with USDT. The pair, responsible for around 21% of all LUNA activity, is the driver for concentrated, fast market moves.
LUNA remains volatile and may temporarily erase some of the gains before attempting another hike. Despite the uncertainty around a BTC year-end rally, a selection of tokens keep making bigger moves as they enter a new stage of price discovery.
With its 54% gain week-on-week, LUNA has a strong start for December. The LUNA weekly gains were only surpassed by Polygon (MATIC), which climbed by more than 19% to $2.13. While not at an all-time high, interest in MATIC is a sign of increasing activity for platform coins.
MATIC is a relatively cheaper way to connect to Ethereum-based projects, though the bridging of assets to the Polygon network may still require relatively steep fees.
Terra Drives NFT and Gaming Adoption
The Terra blockchain has already led to the spread of NFT minting. Over time, simple image-based NFTs are losing their appeal, as the focus shifted to game-based digital items. Tokenizing these items meant gamers could preserve their achievements and even sell them for profit.
Several independent game titles have been added to the Terra protocol, showing a nascent gamified DeFi environment. Currently, multiple projects are competing to build up a gaming community in addition to DeFi traders, and Terra may line up as one of the more easily accessible blockchains.
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