Terra (LUNA) battle downtrends amid investors’ departure, responding to wonderland project scandal, with Abracadabra connection accounting for the damage.
Terra blockchains use LUNA as a native coin and allow individuals to trade the platform’s stablecoins (UST). Meanwhile, LUNA holders can use the currency to pay network fees, stabilize UST prices and partake in voting.
Terra adjusts stablecoins supply according to demand. It uses an algorithm to incentivize the network. That translates to exchanging stablecoins and LUNA at favorable rates, adjusting stablecoins supply.
Terra overtook Binance Smart Chain in DeFi TVL to be the second-largest blockchain. Such moves had Terra surpassing Avalanche (AVAX), Tron (TRX), and Solana (SOL).
However, fortune went against Terra. While publishing this article, Terra dropped to rank 10th on Coinmarketcap, whereas Solana and Avalanche sat at 7th and 12th spots, respectively. Nevertheless, LUNA investors enjoyed 13,000% in returns last year.
The figure came after LUNA retraced from its $103.36 ATH to end the year near $85.48. Nevertheless, LUNA had plunged by 56% since its ATH in December, exploring its current month’s lows of $45.53.
Wonderland Hits LUNA
News of Michael Patryn being part of the Wonderland project team hit the air late the previous week. Though with a hidden identity, reports show the project’s co-founder Daniele Sestagalli knows QuandrigaCX’s Patryn.
QuadrigaCX is a Canadian-based exchange that collapsed in 2019, translating to losses amounting to $130 million. Before that, Patryn had spent about 18 months in a United States Fed prison before his deportation to Canada. Patryn admitted various offenses, including computer fraud and credit card scams.
The market reacted to the news swiftly. TIME, Wonderland token, plummeted to sub-$400. Remember, TIME hit an ATH of $9,948 in 2021 early November.
For the Terra platform and LUNA, linkage to the Abracadabra network led to the damage. Daniele Sestagalli co-founded Abracadabra also.
Traders can stake TerraUST on Abracadabra to facilitate MIM (Magic Internet Money) lending. Meanwhile, the controversy had Sestagalli declaring the Wonderland project end during the weekend.
LUNA Price Action
While publishing this news, LUNA traded with a 7.58% 24hr loss to $46.92. Sunday’s fall had the alt 45% down in January, amid nine days in the red within 11 sessions.
For now, LUNA requires a move past the 50-day exponential moving average at $69.2 to explore the January peak of $93.70. Overcoming this level can see LUNA hitting December record highs of $103.40. Meanwhile, 2022 bullish forecasts eye LUNA at $200.
Editorial credit: FellowNeko / shutterstock.com