Amidst the ruins of a tragic crypto flash crash, a shining, formidable token emerges. Terra's crypto coin Luna has surged to record highs.
The Luna price and market capitalization surged at the time when the rest of the cryptocurrency space went on a nosedive.
During the flash crash, investors saw a chance to "cycle some of their capital to this presumably undervalued asset," according to Eqonex institutional sales manager Justin d'Anethan in a Fortune report.
Terra's Luna Hits All-Time High in Price, Market Cap
Luna skyrocketed to an all-time high of $75.56 on Saturday, with its market cap reaching a record $29.3 billion.
While it pulled back by 17 percent on Monday, Luna's value had increased by about 32 percent in the past week, contrasted against Bitcoin's 15-percent plunge, Ethereum's four percent fall, and Binance Coin's 10 percent drop over that catastrophic crypto week.
By Tuesday, Luna climbed anew to $70.53, based on Coinmarketcap's real-time figures.
Read also: Bitcoin, Ethereum, Top Cryptocurrencies Continue Free Fall in Crypto Crash: $500 Billion Wiped Out
Because of this, Luna is now at the number 10 spot among the largest cryptocurrencies in the world, dislodging the meme tokens Dogecoin, Shiba Inu and the Ethereum rival Avalanche.
In the beginning of 2021, Luna was valued at $300 million. When the coin made its first bull run in July, Luna's market capitalization soared to $2.6 billion. For the past six months, Luna had registered a 900-percent increase in price.
Amid the chaos that enveloped the crypto space with investors abandoning prominent tokens, a bright spot emerged for Terra's Luna due to its perceived stability and the growth potential of its practical use cases, and the coin's resulting utility.
Established in 2018 by South Korean entrepreneurs Do Kwon and Daniel Shin, Terraform Labs operates Terra, a decentralized finance (DeFi) blockchain that utilizes algorithms to produce its own fiat currency-pegged stablecoins, known as TerraUSD or UST, Fortune further noted.
TerraUSD and Luna work in unison: As UST is "minted," or recorded and validated into a new block on the blockchain, that same amount of Luna is "burned" or taken off circulation. Luna benefits from the Terra ecosystem's growth, and suffers from its "contractions," according to Terraform Labs CEO Kwon.
Terra hit a milestone recently, with the total value locked (TVL) on DeFi protocols on the blockchain hitting $11.9 billion on Friday, Yahoo! Finance reported.
Why Investors Are Choosing Luna Over Dogecoin, Shiba Inu
Dogecoin and Shiba Inu's desertion at present and displacement from the top 10 crytpocurrencies list was due to its relatively frail showing in recent months, dropping more than 25 percent in November and slumping quite a lot from their highs.
As a result, investors are choosing that safety option, which is also occurring in other financial markets. They are currently in search for a stable and long-holding asset, which in the crypto space, happens to be the Terra ecosystem and the Luna coin.
Utilized for governance and mining, the Luna coin is the Terra protocol's staking coin that take up the price volatility of Terra stablecoins. Users would stake Luna to Terra miners called validators, who earn from recording and verifying transactions on the blockchain.
It has been one of the best-performing tokens in recent months, adding over 100 percent in value in the past three months, outpacing other cryptocurrencies, Yahoo! Finance further reported. It is also considered among the most bullish at present being a more efficient and less expensive alternative to Ethereum, Solana and Avalanche as a leading DeFi blockchain.
