LUNA 🚀 is the native token of Terra Network, a blockchain platform designed to provide decentralized finance (DeFi) solutions with a focus on creating digital stablecoins pegged to real currencies such as the dollar or euro. Terra Network was launched in 2018 by Terraform Labs, founded by Do Kwon and Daniel Shen.
Role of LUNA in Terra Network:
1. Governance: LUNA is used to participate in voting on decisions and updates related to the network.
2. Stablecoin Stability: LUNA plays an important role in stabilizing stablecoins on Terra Network such as TerraUSD (UST) through a burn and issuance mechanism.
3. Staking and Rewards: Users can stake LUNA on the network to earn rewards.
Notable Events:
In May 2022, LUNA and TerraUSD (UST) crashed dramatically after UST lost its peg to the dollar. This crash resulted in massive losses for investors and caused LUNA’s value to drop from its highs to almost zero.
Later, a new project known as LUNA 2.0 was launched to rebuild the ecosystem, while the old network was renamed Terra Classic with the LUNC token.
LUNA 2.0:
The new version was launched without a stablecoin attached, and aims to rebuild trust between users and investors.
It differs from the old version in its structure and mechanisms, but it still faces significant challenges in regaining its position.