At the moment, the Crypto industry is filled with an array of incredible projects generating much-deserved hype and attention. I’ve written about several including VRA, TRIAS, ZIL, and more. However, if I could only choose one token to make up my portfolio, LUNA would be the easy pick. Yes, I admit, I am a full blown “LUNAtic” as it has been my best performing token this year and one I expect to continue to grow in importance in the year to come. Let’s take a look at this fast-growing blockchain project and why you should think about making it a key pillar of your own portfolio.
What Is LUNA?
LUNA serves as the governance token for the Terra Network. It currently sports a market cap of $20 billion and ranks as the 13th most valuable project in the industry. Founded by Do Kwon and Daniel Shin in 2018, Terra is aspiring to build a fully decentralized financial institution for the digital world. Their stated goal is “to create better money” and they plan to do that with an array of revolutionary applications housed within their own blockchain. These applications include options for instant electronic payments, investments in a variety of asset classes, and the ability to serve as interest bearing assets. What the team is attempting to build is highly ambitious, but so far they are off to a spectacular start. At the moment, you can purchase LUNA on Binance, Kucoin, and Voyager.
The Premier Stablecoin
The goal to build better money starts with the idea of a better dollar and the Terra Network plays host to one of the top stablecoins on the market. TerraUSD ($UST) is the newcomer to the party and serves as the algorithmic center of the blockchain platform. With just under $7.5 billion in assets, it is only the 29th largest cryptocurrency, but rising fast. UST is hailed for its ability to scale and be used in conjunction with LUNA. Given that it will soon be connected to platforms for both Solana and Cosmos, its adoption is rapidly growing and one day may challenge the biggest stablecoins on the market Tether and USDC. It is not inconceivable that one day it may be the premier stablecoin in all of crypto. A key difference from the other major stablecoins is that UST is not backed by the US Dollar making it someone immune to manipulation and interference by the US Government. UST can be easily purchased on exchanges like Kucoin and Bitfinex and will likely be available on Coinbase and Binance in the near future.
The reason I am most bullish on LUNA are the unique tokenomics of the project which are breathtakingly different from anything that has even been attempted in this space. One of the key features is the LUNA burning mechanism which is triggered by the minting of UST. The more UST that is minted, the more LUNA is burned which lowers the total circulating supply. As a result, the remaining LUNA tokens rise in value. With the expected massive adoption of UST to rival networks like Ethereum and Solana, the result should be millions of LUNA tokens burned. That will do wonders for the value of the remaining LUNA.
A single LUNA token which could be purchased for under a dollar earlier this year now sits comfortably in the $50 range. While a x50 return on an investment is obviously fantastic, the somewhat hidden advantage to holding LUNA comes in the generous staking rewards. This is another of my favorite features of the project. By allocating your tokens to a platform like Terra Station (https://station.terra.money/), you receive daily staking rewards, and become eligible for weekly airdrops. Staking your LUNA yields a 10% APY on the tokens themselves. The added value comes in the form of the protocols that currently run on the Terra Network and distribute weekly airdrops to LUNA stakers. On a weekly basis, for every 100 LUNA staked, you receive 2.85 MINE, .1 MIR, and .285 ANC. You also receive one time airdrops from some of the other projects on the Terra Network. So when you are staking a large amount of LUNA coins, it is quite easy to see the rewards pile up.
At the moment there are 9 active protocols on Terra Network including Anchor, a highly useful savings platform which allows you the ability to earn up to 20% APY on your UST holdings. Currently these are the offerings available on the network:
- Anchor — Fixed yield platform
- Pylon — Yield redirection platform
- Mirror — Synthetic assets creation
- StarTerra — Gamified launchpad for Terra Blockchain
- Loop — AMM Dex
- Valkyrie — Social referrals platform for Web 3.0
- Orion — ERC20 token earnings via Anchor
- ApolloDao — Yield-optimizing mechanism
- Nexus — Reliable and secure LTV managment
December promises to bring several more high value protocols including Ozone, Mars, and Astroport. In addition to the current stable, there are 200+ more projects that will launch on Terra Luna within the first half of 2022. With so many exciting projects in development, the possibilities seem endless!
The Future of LUNA is Bright
2022 promises to be an amazing year ahead for LUNA. I’m already on record that the token will hit $100 before the year’s end, but next year could see prices in the $500–1,000 range. Yes, I see that as a real possibility, as increased UST adoption burns more of the LUNA token supply and more protocols are launched that draw more users to the platform. Also, at some point Coinbase will have to list the project which almost always increases demand and has positive price implications.
Right now, the average person probably equates cryptocurrencies with just Bitcoin and Ethereum, but my bet is that in the not too distant future, LUNA will join this exclusive club and take its rightful place among the industry heavyweights. It is certainly not too late to become a “LUNAtic” yourself and be part of the amazing future to come!
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