The event of the breakdown of the TerraUSD (UST) peg seems to have a significant impact on Luna. In this case, Luna is affected because it is the native token of the Terra blockchain.
According to the data, Luna’s supply has reached 25 billion, while it is facing an exponential level of minting.
Looking at the supply of Luna, for the last weeks, its supply was around 325 million Luna. Meanwhile, on Wednesday it reached up to 1.5 billion. As of today, the number rose to 25.3 billion. These statistics show a high increase from the previous day and it is still continuing to rise.
Furthermore, it seems like there is a factor affecting the two tokens. In a thorough analysis, we can see that a behavioral cycle is a key influencer in UST losing its peg. Also, this behavioral cycle is pushing forward a massive amount of selling. In order to help the stablecoin keep its peg to the US dollar, traders are exchanging UST for Luna. This situation is resulting in chaos because of the high level of Luna minting, while its price is decreasing.
Luna’s Price Drop
It is worth mentioning that the token prices are falling as Luna’s supply continues to grow at an alarming rate. Luna’s current market value is just $0.005 compared to $80 six days ago. This makes it a drastic decrease.
Moreover, a lot of Luna holders are affected by this price downturn. Additionally, YouTuber KSI noted that his $3 million worth of Luna is now worth only $100.
What a week. I went to my hamsters funeral, performed in front of thousands of people at Wembley Arena with Anne Marie, my 3 million dollars worth of Luna is now worth a few $100.
And it’s only Thursday.
— ksi (@KSI) May 12, 2022
Given all the above points, the holders are facing difficulties to sell tokens because they were being staked. However, they will be able to get back to selling in the next three weeks. Yesterday, Luna’s blockchain has officially halted working; this may be the end of the Luna project.