- These Top Crypto OGs Love to Hang Out at Parties - September 16, 2022
- Crypto Twitter is Raging Bulls over Name-calling - September 15, 2022
- Stop Putting “Feminism” Labels on the Demand for Internet Privacy in Web3 verse - September 14, 2022
Wrapped LUNA has sustained severe injuries to its reputation after Terra LUNA fell
The global economic and financial markets have been revolutionized after the inception of cryptocurrencies. The industry grew so popular that even after its extremely volatile nature, more investors have joined the market than experts had actually imagined. Recently, the crypto market meltdown has let investors dump their investments and find alternative and traditional alternatives. At this current volatile stage, investors should be highly cautious about their future investments. Experts believe that the present condition of the crypto market is also highly powered by the fall of LUNA. Even a few months ago, Terra was headed toward a tough competition amid the top cryptocurrencies of the market, but as TerraUSD got de-pegged from the US dollar, it dragged down Terra LUNA along with it, wiping out more than half of the investors’ wealth. But even if Terra is in an indispensable position, Wrapped LUNA has been keeping up with the investors’ demand. But the question is after the several blows that Terra LUNA is facing due to the allegations against its Founder, will even Wrapped LUNA be able to maintain its market position as it did before?
What has Wrapped LUNA?
Wrapped LUNA, also referred to as WLUNA is an Ethereum token that is focused on representing Terra LUNA on the popular Ethereum blockchain. But it is not exactly LUNA, instead, it is rather a separate ERC token that is designed to track Terra’s value. But to understand the inner operations of Wrapped LUNA, you need to understand what actually is a wrapped token! So, a wrapped token is merely a tokenized version of another digital asset that is pegged to the value of the asset it represents. It is purposed to redeem or unwrapped at any given point in time. A wrapped token does not necessarily rely on the blockchain that it is issued on.
Coming back to Wrapped LUNA, it is the native utility token of the platform that can be used for a variety of purposes on the platform. WLUNA was initially developed to enable LUNA users to hold, trade, and participate in decentralized applications of DeFi on Ethereum. Besides, with the help of WLUNA, one LUNA can be easily exchanged for one WLUNA and vice versa.
Will the Wrapped LUNA token remain stable amid Terra’s present market conditions?
The recent LUNA crash has also affected the WLUNA price, but since Wrapped LUNA is pegged to the value of Terra, its prices immediately fell along with it. Wrapped LUNA had an all-time high of around US$200 before Terra collapsed, but currently, at the time of writing this article, WLUNA is trending around US$0.00016. This is also majorly affected by Terra’s delistings from popular cryptocurrency exchanges like Binance and Coinbase.
Besides this, TerraForm Labs CEO, Do Kwon, has been accused by the South Korean government of tax evasion charges and of selling the company itself, before TerraUSD’s value fell, eventually leading to the degeneration of the entire Terra ecosystem
It is quite out of the question for anybody to predict how Terra would regain its lost value, but it is quite evident that until and unless LUNA regains back its lost value, Wrapped LUNA would not be able to rise back and beat its all-time high.