The Terra blockchain recently injected approximately $450 million worth of UST into the Anchor revenue reserve through the Luna Foundation Guard. This expanded reserves for the next 12 months.
It was now expected that LUNA would derive some benefit from this, but it did not succeed. In fact, it eventually heeded the broader market cues.
LUNA goes down
Unlike most altcoins and Bitcoin, LUNA actually had a pretty good December. As the rest of the market consolidated to protect against losses, LUNA rose 158.37% and marked an ATH of $99.6, just 40 cents below $100.
Since then, however, the path has not looked good as the altcoin is trading at $49.1 at the time of writing.
Luna price promotion | Source: TradingView – AMBCrypto
This, also despite the fact that the fourth largest cryptocurrency exchange in the world, Kraken, listed TerraUSD (UST) a few days ago.
The price drop has further resulted in a sharp increase in the altcoin’s volatility, with the same increase of more than 20.2%.
The rising volatility of LUNA | Source: LunarCrush
Another attributable factor is the slowdown in development activity in the chain, contributing to the overall negative sentiment within the community.
But even in the loss of LUNA, there is some profit to be made, as Terra is doing well as a blockchain anyway. Investment in the Anchor protocol has grown rapidly since the beginning of this year, as Anchor is the only lending protocol that still delivers returns at the “Anchor Rate” of 19-20% on deposits.
As a result, the total value of the protocol has increased by 24% to $8.46 billion, allowing Terra to maintain its position as the second largest DeFi chain in the world with $15.33 billion worth of TVL.
In addition, Anchor’s token ANC has soared, jumping nearly 90% in a fortnight. While the news of the $450 million on Feb. 10 somewhat shocked investors, the next day returned to normal.
At the time of this report, LUNA was down 9% and trading at $2.31 after rallying from 29.65% in the 2 days before.
Anchor protocol price action | Source: TradingView – AMBCrypto
Surprisingly, in LUNA’s case, investors cared more about the taker than the giver.
This post LUNA may be suffering, but this is what gets support from it
was published first on https://ambcrypto.com/luna-may-be-suffering-but-heres-what-is-gaining-support-from-it/
