Q180. Evaluate the price performance of LUNA following liquidation-inducing drawdowns. What is the average time (days) for LUNA to recover its previous price level. How does this period change relative to the size of the drawdown (in percentage terms)?

Note: this question has the potential for really interesting analysis in exchange for a big time spend. We will award at least 1 bonus LUNA to all submissions of 11.0 or higher.

Terra

The Terra protocol is the leading decentralized and open-source public blockchain protocol for algorithmic stablecoins. Using a combination of open market arbitrage incentives and decentralized Oracle voting, the Terra protocol creates stablecoins that consistently track the price of any fiat currency. Users can spend, save, trade, or exchange Terra stablecoins instantly, all on the Terra blockchain. Luna provides its holders with staking rewards and governance power. The Terra ecosystem is a quickly expanding network of decentralized applications, creating a stable demand for Terra and increasing the price of Luna.

Terra and Luna

The protocol consists of two main tokens, Terra and Luna.

Terra: Stablecoins that track the price of fiat currencies. Users mint new Terra by burning Luna. Stablecoins are named for their fiat counterparts. For example, the base Terra stablecoin tracks the price of the IMF’s SDR, named TerraSDR, or SDT. Other stablecoin denominations include TerraUSD or UST, and TerraKRW or KRT. All Terra denominations exist in the same pool.

Luna: The Terra protocol’s native staking token that absorbs the price volatility of Terra. Luna is used for governance and in mining. Users stake Luna to validators who record and verify transactions on the blockchain in exchange for rewards from transaction fees. The more Terra is used, the more Luna is worth.

The first step in answering the question of why the price of Luna has decreased less than others in the bearish market pressure and has performed well, we need to look at different aspects and different news over time.

The first step is to explain how Luna and Tera work As mentioned, UST is the main currency of Terra network and it is backed by Luna currency, which has an interesting relationship between them.

You know that the backing of any currency is something, for example, the backing of tetra is the dollars stored in the tether bank. The backing of mim are LP tokens.the backing of UST are the luna tokens which can burned or not to make ust stable as 1$ value . It can often be worth 1$

some reasons for the answering why luna has decreased less in price and the mechanism:

burning mechanism for luna

what is the circulating of tokens ?

the total circulating tokens existing on a network , not burned and also not staked tokens and the below chart show us the circulating luna over recent 3 monthes

According to the mentioned mechanism, whenever UST Stable Coin is issued, the equivalent of Luna token must be burned. This creates a correlation between the two assets. Whenever demand for UST rises, the price of LUNA will rise.

As we know, stable coins are one of the main needs of the cryptocurrency market and people are looking for stable coins that are decentralized and backed by something .so that their value will remain constant in the fall or rise in the market.

As people become more familiar with cryptocurrency, the amount of stable coins must inevitably increase, and this means another thing for the Terra network.Basically, increasing tera means burning more lunas and increasing the price of lunas over time

This is a natural process that takes place over time. Other factors are also influential, such as the proposals that are voted by the community, decisions to preserve the value of Luna and Terra by the Terra team, and so on.

Do Kwon, co-founder and CEO of Terraform Labs, has announced that the UST market will reach 10$ billion. UST is the first decentralized stable coin on the market to achieve this, and now surpasses the decentralized stable stable coin DAI with a market volume of $ 9.3 billion.

and now (APR 17 ):

• $UST just flipped $BUSD.

2 more to go.

luna staked and circulating supply

• Luna's market value is now $ 34 billion, of which about $ 30 billion has been directly deposited on various platforms. In this way, Luna has surpassed Ethereum in terms of total staked value, which is a stunning success.

LFG and NEWS

The Luna Guard Foundation (LFG), a non-profit organization, has raised 1$ billion through the sale of Luna Token OTC tokens. This news was announced in the tweet of Terra Network :

This event is one of the most successful fundraising campaigns in the history of the crypto industry. The event was hosted by Jump Crypto and Three Arrows Capital, and was attended by several other important venture capital firms.

Proceeds from the $ 1 billion sale of the Luna Token, a native blockchain token, will be used to build a bitcoin-based foreign exchange reserve for the UST Stablecoin.

The Luna Guard Foundation (LFG) said the $ 1 billion stockpile acted as a "safety valve" for UST repurchases, keeping the terra price stable during periods of strong sell-offs in the crypto market.

On February 22, the Luna Guard Foundation (LFG) announced that it had raised $ 1 billion through the sale of LUNA tokens to stabilize StableCoin. This is an important support for the steady increase in the supply of stable UST coins. Luna's price has risen almost 90% since the announcement. While the total value of cryptocurrencies has increased by only 13% in the same period, which indicates that crypto currency traders have invaded the market.

you can check here for more information

• some of other news as below

rune , osmosis , bridges

rune:

• Terra integration (LUNA) in the THORChain protocol. This integration makes it possible to support all Cosmos-based projects in the THOR blockchain.The integration of Terra, LUNA cryptocurrencies and Stable Coin brings UST into the THORChain ecosystem and gives users more options for trading and sticking. the throswap enables users of litecoin, bitcoin,ethereum,thoirchain,bitcoincash,dogecoin,bnb and.. networks to transfer their assets to terra network . it leads to atract more and more users from these big networks and also burning more luna for providing more ust for them

osmose :

• It is an advanced automated marketing (AMM) protocol that allows developers to build custom AMMs with strong liquidity pools. Osmosis is built using the Cosmos SDK and uses the Inter-Blockchain Communication (IBC) capability to enable intermediate chain transactions. This platform enables users of kava , cosmos ,cro ,Secret ,cronos,osmosis and.. networks to transfer their assets to terra network and have a better expereince of defi

bridges:

• Creating bridges such as shuttle and wormhole connects various blockchains, which in turn increases the number of Luna users and the use of UST Stable Coin , which leads to burning more Luna to multiply UST. Remember that terra blockchain bridges are supporting more than 7 networks like ethereum,polygon,bsc,solana,harmony,osise and.. networks

chart and events

conclusion

Luna is not a competitor to Solana and Ethereum because it has many special features that no one has. like supporting:

• burnning mechanism for supporting UST

• the staked amount of luna in comparision to Ethereum or solana

• connections with other networks with bridges , cross chain swaps,thorswaps , ibc bridge

• the LFG Foundation

• and many other interesting featuers for luna and terra ecosystem show us the Bright future

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