The circulating supply of Luna (LUNA) has broken above 25 billion as the token is being minted on an exponential level.
This state of affairs is due to the breakdown of the TerraUSD (UST) peg and its relationship with Luna, the native asset of the Terra blockchain.
For the last few weeks, the supply of Luna stayed around the 325 million mark. Wednesday, it shot up to 1.5 billion, and today it has increased as high as 25.3 billion — and it’s still growing at a furious rate.
As The Block previously broke down, a behavioral cycle is affecting the two tokens in light of UST losing its peg and a huge amount of selling pressure. At present, many traders are swapping UST for Luna, a mechanism designed to help the stablecoin maintain its peg with the US dollar. Yet as the price of Luna decreases, this results in the minting of a lot more Luna — a back-and-forth dynamic that has escalated out of control.
With the rapidly increasing supply of Luna, its token price continues to shrink. The current market price of Luna is just $0.005 — down from $80 six days ago.
This has affected many Luna holders, with YouTuber KSI noting that his $2.8 million of Luna is now worth just $1,000. “Yeah I’m packing this in,” he tweeted.
Many holders have been unable to sell their tokens as they were being staked and will only be able to sell in up to three weeks’ time.
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