Terra Luna Price Up 59% Today, Why Is the Price Rising?

Terra LUNA’s price is up over 59% today, currently trading at $0.0001912, surpassing $1.2 billion in market capitalization. The recent price hike for LUNA is most likely due to Terra’s Founder, Do Kwon’s statements yesterday, responding to accusations and questions from the community, which put the market at ease. Let’s look at Terra LUNA and UST and see what the future may hold for the two cryptocurrencies.

Revival Plan 2 Will Most Likely Get Approved

There are only two days left for the latest Terra Builders Alliance: Rebirth Terra Network revival plan proposal. The new plan suggests creating a new Terra chain without the algorithmic UST stablecoin.

The old chain will be called Terra Classic (with the token LUNC), while the new chain will be called Terra (LUNA).

In addition, according to the proposal:

“Luna to be airdropped across Luna Classic stakers, Luna Classic holders, residual UST holders, and essential app developers of Terra Classic. * TFL’s wallet (terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6) will be removed from the whitelist for the airdrop, making Terra a fully community-owned chain”

At the time of writing, over 65% have voted in support of the proposal, with 20.51% voting to abstain, 0.38% voting no, and 13.75% voting no with a veto.

While technically, the proposal could still get denied, at this point, it will most likely get accepted. The acceptance of the upcoming proposal is a significant driver for the current bullish momentum for LUNA.

Community Is Starting to Burn LUNA

While Do Kwon is supposedly opposed to burning LUNA since it hasn’t been mentioned in his new proposal, the community has started burning LUNA after Do Kwon provided a burn address via Twitter.

terra1sk06e3dyexuq4shw77y3dsv480xv42mq73anxu

There u go

— Do Kwon 🌕 (@stablekwon) May 21, 2022

According to Bitquery.io, the burn address received over 250 million LUNA tokens at the time of writing. At current prices, that’s roughly $47k, a relatively low amount in the grand scheme of things.

Keep in mind that LUNA’s current supply is over 6.5 trillion. 250 million is a drop in the bucket compared to the overall circulating supply of the cryptocurrency. If that number reaches 1 trillion, then it could substantially impact the price and sentiment of the token.

Final Thoughts

It seems that LUNA has found a bottom, as prices have remained relatively stable this weekend, and the cryptocurrency manages to maintain a $1 billion market cap. The new proposal is a significant driver in maintaining current valuations and is responsible for the bullish momentum for LUNA this weekend.

Whether LUNA can remain above its $1 billion market cap will be up to its community and whether the Terra Luna ecosystem can continue providing value despite the demise of its UST stablecoin.

Speaking of UST, the stablecoin managed to gain 12% today. However, it’s still down over 95% in the past two weeks, currently trading at $0.064. Since the new proposal looks to fork Terra Luna without the stablecoin, the chances are that UST will eventually end up near zero. Surprisingly UST’s market cap is still at $700 million as traders continue to hold the token.