As UST demand rises, $2.7 billion in LUNA Tokens have been burned in December.

UST demand is increasing, with 27 million LUNA tokens destroyed so far in December.

According to Terra Analytics, approximately $2.7 billion in LUNA tokens, or 27 million tokens, have been burnt so far in December as UST demand surges. On December 27, LUNA reached an all-time high of $104 before falling slightly. According to CoinGecko statistics, LUNA was changing hands for $98.68 at press time, up 26 percent in seven days.

According to Terra Analytics, the supply reduction at the beginning of December was 94,243,648 units. The discrepancy between the current supply decrease and the projected supply reduction is about 27 million.

Since the Columbus-5 upgrade went into effect at the end of September, 102.71 million LUNA tokens have been burnt. Aside from interoperability, the Columbus-5 upgrade added a new method for maintaining stablecoins tied to fiat value: whenever UST is minted, the same amount of LUNA is burnt.

This creates a direct link between the two assets, such that “As UST demand goes up, LUNA’s price also goes up.”

According to CoinGecko, the value of LUNA, Terra blockchain’s native asset, has increased by 18,134.1 percent this year. By market capitalization, Terra is the ninth-largest cryptocurrency.

Do Kwon, Terraform Labs’ co-founder and CEO, said that Terra’s UST has reached $10 billion in market valuation, making it the first decentralized stablecoin to do so. When UST reaches this milestone, MakerDao’s DAI market capitalization of $9.3 billion is flipped.

TerraUSD (UST) is a one-of-a-kind algorithmic stablecoin in which units are destroyed or manufactured in order to maintain the coin’s value at the specified price. The program will automatically burn a batch of coins in order to create scarcity and, as a result, raise the UST price.

Patrick

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