By
Godfrey Benjamin
April 24th, 2024
Terra UST is kept in price balance by a mechanism that involves LUNA through market demand and supply options.
Terra Foundation’s native token LUNA hit its all-time high around $103.88 on March 9 but has since dropped approximately 8.9 percent. To the Terra community, it was a great milestone achievement, however not for the XRP community. Notably, LUNA’s market cap briefly overtook XRP’s market cap. As of Thursday mid-morning Europe times, XRP was position six followed by LUNA at position seven, according to CoinGecko.
The Terra ecosystem is on fire. Terra’s USD pegged UST has overtaken Shiba Inu and is now eyeing Dogecoin. Money inflow and investment in the Terra ecosystem have significantly spiked over the past few months.
Notable crypto market bull riders are rushing to the LUNA market. Moreover, the general crypto market is perhaps trapped in its historical bear market that could sustain for the next at least two years.
Blockchain technology is evolving in unexpected ways pivoted by the global geopolitical status. For instance, people in Afghanistan are reportedly using Bitcoin and other digital assets to navigate government sanctions. Additionally, there have been reports of increased use of crypto assets in Russia following global sanctions.
From another perspective, the crypto market has significantly morphed fueled by increased government regulations. For instance, stablecoins including Tether USDT have been heavily scrutinized for being directly pegged to the dollar. Therefore, blockchain developers have come up with a subtle way of creating stablecoins without pegging directly to the dollar in reserve.
Terra UST is the perfect example that has been able to circumnavigate the US regulators on dollar reserves. Notably, the Terra UST is kept in price balance by a mechanism that involves LUNA through market demand and supply options.
Bigger Picture on Terra (LUNA) and XRP Scenario
XRP is a veteran in the crypto industry but is being pulled behind by the ongoing SEC lawsuit case. Ripple, however, is flexing its muscles to win the case that could detail XRP’s future growth prospects.
LUNA on the other hand is laser-focused on gaining more attention and users on the ground. Money is evolving and the means of value transfer is getting more and more decentralized. Nevertheless, governments, especially the military superpowers, remain in control of the global economy as depicted in the Russia-Ukraine war.
According to market data provided by CoinGecko, LUNA has a market capitalization of $34 billion while XRP enjoys a market cap of approximately $35 billion. Of note, LUNA enjoyed a higher trading volume in the past 24 hours with approximately $4.46 billion whilst XRP recorded a traded volume of approximately $4 billion.
Notably, the Terra Foundations is eyeing the smart contract sector that has a huge and notable potential. “Price volatility makes smart contracts unusable for most mainstream financial applications, as most users are accustomed to valuing determinate payouts in insurance, credit, mortgage, and payroll. Terra will offer a stable dApp platform oriented to building financial applications that use Terra as their underlying currency, thus allowing smart contracts to mature into a useful infrastructure for mainstream businesses,” Terra’s Whitepaper reads.