LUNA hits new lows as Kwon pursues plan to restore UST peg

The price of LUNA, the native token of the Terra blockchain, hit new market lows Thursday morning.

The cryptocurrency dipped below $0.30 for the first time early on May 12, hitting a low point of $0.21 as of press time, based on Binance data. Binance currently facilitates more trading in LUNA than any other exchange, according to CoinGecko.

The price of LUNA first fell below $1 yesterday, down from more than $65 at the start of the week.

Over the past few days, TerraUSD (UST) — an algorithmic stablecoin native to Terra that is supposed to track the price of the US dollar — has drastically de-pegged, throwing crypto markets into crisis. 

UST’s price currently stands around $0.60, according to Binance, but it had dropped as low as $0.02250.


Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

Bitcoin's price has also fallen sharply this week. At press time, the cryptocurrency is trading at roughly $26,660, having hit a local low of $26,607 on Coinbase, per TradingView data.

The fact that LUNA continues to plummet while UST has made some progress towards regaining its peg may be connected to the efforts of Terraform Labs CEO Do Kwon, who outlined a plan to try to restore the peg yesterday.

Kwon endorsed a community proposal to increase the amount of LUNA being minted per day by four times to help UST holders cash out, easing selling pressure. The proposal acknowledged that burning billions of LUNA would dilute the currency significantly.

“Nevertheless, there are no limit in LUNA supply, this market mechanism will actually work to bring stable UST and stable LUNA price (although likely at lower price point for LUNA),” the proposal stated.

For more breaking stories like this, make sure to subscribe to The Block on Telegram.

About Author

Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and writer. He enjoys all things active, especially running, rugby, climbing and tennis.