The LUNA crash in May 2022 was one of the most brutal cryptocurrency crashes ever. The crash entailed the crypto’s reserves to fall from 80,000 to 300. It left several investors shocked and many with a huge amount of losses. The crypto stablecoin tied to LUNA, UST, whose value was debugged when the crash took place, was once known as the most scalable stablecoin, but then it crashed. The crash not only took a hit on itself but also decreased the value of other crypto coins, (even Bitcoin and Ethereum) thus decreasing the value of the cryptocurrency market as a whole by almost 400 billion dollars.
Although LUNA is suffering right now, people still have hope that the cryptocurrency will make a comeback shortly and become profitable again as it once was. It will surely be long before we can see LUNA returned to its former glory. But what exactly are the possibilities of LUNA recovery shortly? Let’s delve into it.
It is understandable, that at this point many investors are worried and have lost overall faith in LUNA. The promises of the LUNA developers have been falling on deaf ears. After suffering through a huge loss, they do wish that a speedy recovery takes place, but hardly any of them believes it.
What are the developers doing to increase the possibilities of LUNA recovery in near future?
The founder of the Terra network has addressed concerns that arose due to the LUNA crash in a very promising way. His plan involves strengthening the crypto and rebuilding its position.
The developers intend to increase the burn rate of the UST, thus, the initial parts of their plan involve huge amounts of Terra(USD) to be burnt. This is hoped to stabilize the coin’s value back at 1 US dollar and repeat it to the respective fiat currency (USD). This will be done by burning over 370 million UST tokens on the Ethereum blockchain.
The next part will require 240 million LUNA tokens to stabilize governance and keep control.
Currently, the entire blockchain has been completely halted, resulting in the freezing of any transactions. This was done to avoid investors from taking advantage of LUNA’s price and using this opportunity to buy up the cryptocurrency in huge amounts.
After the crash, many investors pulled their investments from this project for obvious reasons. After the above-mentioned step, the developers hope that the investors will come back by convincing them to stay on. For the aforementioned reasons, the investors are skeptical about returning as the crash has cost them losses of millions. Before the crash, it was a known fact that LUNA was doing exemplarily great in the cryptocurrency market. It was known to be one of the best-performing crypto projects in recent years. Had it not been for UST, Terra Luna would have still been one of the best-performing crypto coins. Therefore, it is up to the developers to show this to the investors and persuade them into staying on the project.
The developers would also need to address the issue of LUNA’s relationship with UST. The developers need to make and do good on the promise that such a fall (and then eventually, crash) will never happen again.
Getting back the investors is the key method of getting LUNA to recover. Should the investors be convinced enough to invest in the project, LUNA is sure to reach its recovery point, raising the possibilities of LUNA’s recovery in the near future.