LUNA Hits ATH After Astroport’s Deployment, Why Terra Could Continue Growing In 2022
Maybe one of the best-performing assets in 2021, LUNA has been trending against the market for the past 2 weeks. While Bitcoin, Ethereum, and other major cryptocurrencies remained rangebound, the native token for the Terra ecosystem re-entered uncharted territories.
As of press time, LUNA trades at $87 coming in from a monthly low at $38 which represents almost a 40% increase over that period.
As reported by NewsBTC, Terra deployed several improvements on its mainnet in the past months. These included Colombus-5, Wormhole v2, and an Inter-Blockchain Communication (IBC) protocol.
The first of these upgrades could be the fuel that has triggered LUNA’s rally as it implemented a burning mechanism into the network. Effectively, this upgrade has turned LUNA into a deflationary asset that will continue to see buying pressure into the future.
Per a report by Delphi Digital, the Terra ecosystem has also benefited from the deployment of Astroport, an Automated Market Maker (AMM). The protocol is yet in an early phase but has already seen over $1 billion in capital inflows.
This capital injection into Terra’s ecosystem coincides with LUNA’s rally which goes to show the importance of adoption for this token’s performance. Delphi Digital said:
LUNA price notched another ATH today before retracing lower. The price increase over the last few days was likely triggered by investors buying spot LUNA to lock up in the Astroport lockdrop, then hedging their position via perpetual futures to remain delta neutral.
As the chart also shows, LUNA has the right ingredients to continue its rally: reaching price discovery on negative funding rates for the derivatives sector, which suggests speculators expected more downside in a short time. It remains to be seen if the trend will be able to hold in 2022.
Terra (LUNA) And Its Potential To Take Over 2022
LUNA’s ecosystem has displayed strength in other sectors. The network’s native stablecoin UST has been gaining more adoption and could potentially disrupt this sector of the crypto market.
Delphi Digital records an increase in market capitalization for UST since December 15th. This stablecoin has been in a close fight with DAI, one of Ethereum’s most prominent assets, as seen below. Delphi Digital added:
UST and DAI have been neck-and-neck in terms of market capitalization, with UST briefly overtaking DAI as the 4th largest stablecoin last week. Yesterday, UST overtook DAI more decisively as it had been trading higher for at least the last 24 hours.
Christmas is still some days away, but December has already proven itself as one of LUNA and Terra’s most important months in 2021. With solid fundamentals, this network seems poised to continue its upwards trend in the near future.Source