Terra’s native token LUNA saw remarkable upswings within the past 24 hours, gaining more than 20% to hover at $99, beneath its lifetime peak. That comes as the broad crypto spectrum sees bullish moves. However, two other factors contribute to Terra’s current surge. They are stablecoin UST demand and consistent LUNA tokens’ burn.
LUNA was among the best-performing alt since last month, gaining 47%. Contrarily, the leading alternative coin, Ethereum, lost nearly 12% within the timeframe.
High-Yield Seeker Drive UST Demand
UST, via Terra’s Anchor Protocol (ANC), offers depositors an almost 20% yearly percentage yield, making it one of the top-yielding stablecoin in the marketplace. Yields on leading stablecoins, including Binance USD, USDC, and Tether, hit 12%.
Users can use LUNA when staking on the Anchor network. Moreover, the token absorbs market volatility, helping UST keep its stable tie against the US dollar. Anchor Protocol’s governance token ANC also gained about 62% within the previous month.
The latest market volatility amid the Russia-Ukraine war had traders jumping into the Anchor network for market-beating and constant returns. The war enhanced stablecoin demand. They’re a haven within the cryptocurrency market.
LUNA Burning Rate Increases
Besides using LUNA to stake UST, individuals can burn the token mint UST or vice versa. Burning LUNA worth 41 can produce one UST. That leads to reduced token supply within the marketplace, boosting the currency’s value.
Terra analytics data shows the platform has burnt nearly 40 million coins within the past 30 days, dropping LUNA’s total supply to 360 million alts in circulation. Coupled with the token’s growing demand, Terra saw price upticks.
The Terra community remained active backing UST. For instance, they recently built a $1B BTC reserve to keep the 20% yield from ANC, adding credence to the UST’s status as a stablecoin. The latest reports suggest that the community will magnify its reserve.
Technical indicators show Terra is ready to climb to record highs soon. While publishing this content, LUNA changed its bullish hands at $99.95. Let’s watch how the alt challenges its ATH and potential print new lifetime highs.
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