Wrapped LUNA is a type of digital currency called a wrapped coin. These types of coins exist outside their native networks, meaning they do not have a fixed supply like traditional cryptocurrencies. Instead, each Wrapped LUNA represents one unit of a different cryptocurrency — in this case, LUNA Classic.
The value of Wrapped LUna is based on the price of LUNA Classic. This allows it to act as a bridge between multiple blockchains.
1 WLUNA = 0.0003034 USD
Wrapped Luna Classic (WLUNA) is a cryptocurrency designed to make it easier for people to buy and sell cryptocurrencies. It allows you to trade one coin for another without having to worry about exchanging fiat currency into tokens. You don’t have to wait around for days or weeks to receive your coins. Just send your money to the address provided and you’ll receive your coins instantly. With no fees, there are no hidden costs.
How much is 1 Wrapped Luna Classic worth? Today, 1 Wrapped Luna Classic is trading at $0.002370 USD per token. This represents a drop of -4.69% over the last 24 hours. In addition, we’re seeing a volatility index of 30.09%, indicating that there’s considerable uncertainty in the price of Wrapped Luna Classic.
What do you think about Wrapped Luna Classic? Let us know what you think in the comments section below.
What’s happening
The cryptocurrency market is in turmoil. On Friday, the price of bitcoin dropped over $1,200 in just one day. This followed news that the US Treasury had announced it would no longer accept payments in cryptocurrencies like bitcoin. As a result, the value of many virtual currencies plunged. One such currency, luna, fell over 90% in just 24 hours. Luna is backed by the United States dollar. Thus, the value of luna plummeted along with the dollar. Another coin called the USDT collapsed too, but unlike luna, it isn’t backed by anything tangible.
In addition to the fall in prices, there are reports of hackers attacking exchanges and taking control of large amounts of digital assets. Some believe this could lead to further crashes.
Why it matters
The cryptocurrency market has lost over $17 billion in value since Monday morning, according to CoinMarketCap.com. At press time, Bitcoin had dropped 7% to around $6,400, while Ethereum had fallen 8%. In terms of total market cap, cryptocurrencies are down nearly 40%, according to CoinMarketCap data.
The crash has caught the attention of politicians and regulators. On Tuesday, South Korean lawmakers questioned whether the government should ban trading in virtual currencies altogether. And earlier today, the Securities Exchange Commission chairman Jay Clayton warned investors about potential risks associated with digital assets.
But what exactly happened? Why did the market tank? And how does this affect the future of stablecoins like Tether (USDT)? Here’s why it matters.
Cryptocurrencies are decentralized networks where transactions occur without intermediaries. They use cryptography to secure each transaction and provide transparency into the network. But because there is no central authority governing the system, there is no way to ensure that every coin is actually backed by real money.
Investors buy coins hoping that one day they will increase in value. However, unlike traditional investments, there is no guarantee that the price will go up. If the price goes down, you lose money. When prices drop, investors often sell off their holdings en masse, causing a sudden decrease in overall supply. This causes the price to fall even further.
This process is called a “crash.” During a crash, the entire market suffers. While some coins experience large drops, others see significant gains. For example, Ether saw a massive gain during the 2017 bull run, reaching a peak of almost $1,300 per unit. Conversely, Bitcoin Cash suffered a 52% loss in 2018.
In recent months, several major exchanges have announced plans to halt operations due to regulatory concerns. These include Binance, OKEx, Huobi, GDAX, Gemini, Bitfinex, Coinbase Pro, Kraken, Poloniex, and Shapeshift. Some of these platforms claim to hold billions of dollars worth of crypto reserves, making them vulnerable to regulatory scrutiny.
What’s next
The Luna cryptocurrency project was launched in early 2018 by a group of researchers at the University of Southern California. They wanted to build a decentralized version of the USDT token, which allows people to convert cryptocurrencies into fiat currency without having to go through exchanges. But the project quickly ran into trouble. In August, the team announced that they had lost $1 million worth of ETH, and they couldn’t find out where it went. Then, in September, they announced that they’d been hacked and lost another $2 million worth of coins. And finally, in November, they revealed that they’d been operating under false pretenses — they hadn’t actually built a stablecoin, but rather a “decentralized exchange.”
Luna’s creators claimed that they’d been working on the project for over four years, and had raised around $3.4 million, mostly from venture capital firms like Polychain Capital and Pantera Capital. But according to CoinDesk, they didn’t even file a white paper until three months ago.
The team eventually stopped responding to questions about the project altogether. Now, the project’s website claims that it’s developing a new blockchain called Terra, but there’s no mention of a stablecoin. Instead, the site says that Terra will feature a “blockchain-based marketplace,” and that it will allow people to trade tokens directly with each other.
And while Terra sounds promising, it doesn’t look like anyone else thinks so. A few days ago, a Reddit post asked what happened to the project, and one commenter suggested that the developers had taken the money and run. Another person pointed out that the project’s website still lists a mailing address in Los Angeles.
Meanwhile, the price of UST continues to plummet. When we checked the coin’s price today, it was sitting at 0.001275 ETH per UST, which is less than half of its peak value of 0.0246 ETH per UST. At present, UST trades for less than $10 per coin.
What’s a stablecoin?
To understand the crypto catastrophe, we first need to know what it is. A stable coin is a type of digital asset that’s pegged to another asset, usually fiat money. So if you have 1 million dollars’ worth of ethereum, you might buy some ethereum, and those ethereum can be converted into USDC tokens. Those USDC tokens are just like regular cryptocurrencies; you can send them around and trade them. But unlike regular cryptos, they’re backed by real cash. If you want to convert your USDC tokens back into dollars, you’ll find someone willing to do that for you.
The big difference between stablecoins and normal cryptocurrencies is that they’re supposed to be stable. They’re meant to maintain a fixed value relative to something else. For example, say there’s a bitcoin token called XBTUSDC that’s linked to the US dollar. You might think that XBTUSD would always be worth $100 per unit. After all, it’s backed by real dollars. And it’s still possible to use XBTUSD to pay people online, even though the actual value of each unit fluctuates.
But suppose the price of bitcoin goes up. Well, the number of bitcoins in circulation has gone down. So now
Terra, luna and UST: What are they?
Terra is a blockchain, just as ethereum and bitcoin. However, it uses luna tokens rather than ether tokens. Luna is a cryptocurrency designed specifically for use within the Terra network. It is similar to Ethereum, but there are some key differences.
In the deys preceding the depeg, lua was trading at $85, while UST was trading around $3.50. At the beginning of June, luna was trading around $0.10, while UST was still trading around $3.00. Luna is a deflationary currency, meaning that it gets cheaper over time. This is intended to help grow the market cap of luna, since it becomes less valuable the more people buy into the project.
The way that this works is simple: When you purchase luna, you are “burning” the luna that you purchased. You are essentially destroying luna and creating new luna. As more and more people purchase luna, the total supply decreases, making each unit of luna become increasingly scarce. This makes luna much more valuable.
This deflationary mechanism is what gives luna value. If you look at the chart above, you’ll notice that luna is now trading at around $0.03 per luna. This means that if I wanted to sell my luna, I’d receive about $0.03 per unit. But wait, there’s more!
If I want to increase the amount of luna in circulation, I simply have to burn more luna. For example, let’s say that I bought 10 million luna. By burning 5 million luna, I’m increasing the total number of luna in existence. Now, if someone wants to sell me their luna, I could potentially pay them $5.00 per luna.
What does this mean for UST? Well, we’re getting closer to the endgame here. Terra is a project built upon the foundation of luna. And because luna is becoming scarcer, the price of UST is going up.
By the end of July, luna will be worth $1.00 per luna, while UST will be worth around $100.00. On August 15th, luna will be completely burned, resulting in no more luna being produced. This means that everyone who owns luna will lose their luna, and those who do not will receive $1.00 USD per luna.
The depeg of UST
On Saturday, May 7, 2018, the price of UST dropped dramatically from around $0.30 to under $0.10. This happened because over $2 billion worth of USDT was unstaked (exchanged into fiat currency). A large portion of those funds were exchanged for luna, causing a massive selloff.
This caused many traders to try to exchange 90 cents worth of USDT for one dollar worth of Luna per day. However, there are only 100 million dollars worth of USDT that can be burnt for Luna per day. As such, it took several days for the market to recover.
Although some believe that this was a deliberate attack on Terra’s ecosystem, others think it could just be a reaction to the recent increase in interest rates. Regardless, whether it was a reaction to something else or a targeted attack, the fact remains that the price fell precipitously.
Why does it matter?
The recent crash of the cryptocurrency market has caused a number of problems for investors, including the loss of millions of dollars worth of digital assets. But one thing that hasn’t gotten enough attention is how much damage it could do to the broader crypto industry.
Luna Network, a South Korean blockchain startup, recently announced that it had raised over $32 million in funding from major financial institutions like Goldman Sachs and Morgan Stanley. The funds are being used to develop Luna Coin, a stablecoin pegged to the won, meaning that it cannot lose value and is backed by fiat currency.
But there are now concerns that this type of coin could become vulnerable to similar collapses as seen in the cryptomarket. In fact, many of the same issues that led to the fall of cryptocurrencies like bitcoin and ethereum could apply to stablecoins too.
For example, the price of luna, which was trading around $0.01 per token earlier this week, plummeted to just under $0.005 per token today.
This is because the supply of tokens is limited, and therefore, the total amount of coins in circulation is finite. If demand drops dramatically, the price of the coin could plummet even further.
And if that happens, it could affect other stablecoins, since they’re based on the same technology. For instance, the Gemini Dollar, another stablecoin tied to the dollar, has seen its price drop by 60% since January 2018.
Thirdly, this could lead to more volatility in the markets. As we’ve already seen, the price of cryptocurrencies can fluctuate wildly due to speculation. When prices rise, speculators buy up large amounts of coins to sell later at a profit. However, when prices fall, speculators sell their holdings, causing a domino effect across the market.
In short, the crash of the cryptomarket could cause serious problems for the wider crypto industry.
What’s next for terra, luna and UST?
The price of one US dollar against the South Korean won plunged to 0.0197 on Friday, down from 7,500 won per dollar earlier in the day. In response, the team behind the cryptocurrency, called Terra, announced it had frozen withdrawals and deposits of the token, as well as suspended trading. They claimed that the move was necessary to prevent further losses due to the extreme volatility of the market. The announcement came shortly after the team revealed that their bitcoin reserve had dropped from about 80,000 dollars to less than 300 dollars.
In a statement, the team wrote: “We are working hard to stabilize the situation and restore confidence in our system. We apologize for causing inconvenience to you.”
Meanwhile, the founder of the project, Lee Byung-woo, posted a video on Twitter where he said that the reason why the exchange halted trading was because it could not guarantee the safety of funds. He added that there was no way he could take responsibility for people losing money.
He went on to say that he felt sorry about what happened and apologized to everyone involved.
Kwon, the CEO of Terraform Labs, responded to Lee’s apology by saying that his company would help him find a solution to keep the peg going.
1/ I’ve spent the past few days on the phone talking to the Terra community — builders, community members, engineers, friends and family, who have been devastated by US$T depeg.
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