Terra Luna has shaken the crypto market after a rally that saw it hit a new all-time high of $104.58 yesterday before retracing it to $94.81 today.
At the time of writing, it was trading at $94.81 down about 2.7% in the last 24 hours in a slight pullback after a three-day non-stop rally.
In this article, we shall take a deep dive into what is causing the Terra (LUNA) price to skyrocket. But before doing so, it is important to first explain what Terra (LUNA) coin is.
What is Terra Luna?
Terra (LUNA) or simply LUNA is one of the native tokens of the Terra blockchain protocol that is used for algorithmic stablecoins (tracking the price of fiat currencies).
The Terra protocol is powered by two tokens, TERRA and LUNA, where Terra burns Luna to track the price of fiat currencies. Luna is the native staking token for Terra protocol. When users lock their assets, they are rewarded using Luna and also allowed to vote for future projects.
Why is Terra Luna’s price skyrocketing?
One of the reasons for the recent bullish trend of LUNA is the growing Terra ecosystem. According to TerraSwap, Terra’s leading Decentralized Exchange, both volume and liquidity of LUNA have been over the past few weeks.
In the last 30 days, over 1.45 billion USDT were traded on TerraSwap, a clear sign that the ecosystem is growing.
There is also an increase in the number of new wallets in the Terra Station, showing that more crypto enthusiasts are adding the coin to their crypto portfolios.
Additionally, the Terra ecosystem also features some Metaverse, dApps, and NFT projects and the popularity of Metaverse and NFTs among crypto enthusiasts is currently through the roof.