Key Takeaways
- Columbus -5 System update is the most important since the launch of Terra.
- The integration of the IBCP protocol has made communication between blockchains possible.
Luna, a blockchain protocol that employs fiat pegged stable coins like Terra USD(UST) to develop a worldwide system of payments, has seen a bullish movement in its token to a novel all-time high, right after the launch of its much-anticipated system upgrade.
Relying on data from Tradingview, Luna, after reaching a low of $23.81 on Sept. 21, soared by 108% to create a new all-time high of $49.55 on Oct. 4.
The three factors responsible for lunas price surge are:
- the Columbus 5 System Update
- the adoption of IBCP
- the total value of locked Terra on the protocol
1. Columbus -5 Update
Columbus -5 update officially came alive on Sept. 30, and it is considered the most pivotal upgrade to the protocol terra developers and independent watchers. Columbus- 5 upgrades revamped Luna's tokenomic model and introduced a model where all Luna utilized in minting UST will be burned instead of putting it into a communal pool.
Relying on statistics, the origin block of Columbus 5 has burned more than $832million worth of luna. The futuristic view advantage of this is that the value of Luna will grow significantly.
2. Acceptance of IBCP
Inter-blockchain communication protocol or IBCP is an interoperability protocol that enables interaction between blockchains. The intercourse between luna and inter-blockchain communications enables the flow of communications between the Terra network and protocols in the cosmos system. This integration significantly increases the mass acceptance of Terra and its UST stable coin in its ecosystem.
Because a larger number of projects now have access to UST, the supply of LUNA may deflate further as more UST is burned in the process of minting more UST.
3. The percentage of Terrans captured in the system.
A rationale for the bullish market volatility in LUNA is the network's booming community of decentralized finance (DeFi) technologies, which has helped boost the combined value stored on the protocol to a record high.
Terra's TVL is well above $10 billion, with Ancor Protocol (ANC) emerging in number 1 with $3.86 billion. ANC is the key technique of issuing new UST by offering LUNA or Ether (ETH) as security. Other significant DeFi protocols on the system comprise Lido (LDO), a TVL of $3 billion. Mirror (MIR) has a TVL of $1.38 billion, and Terraswap has a TVL of $1.32 billion.
