Protocol updates are one of the main reasons behind rallies, as they demonstrate the commitment of developers to fix bugs, accommodate user requests, and add new features that will make the protocol competitive and increase value. of the token.
Another record-breaking token project after the long-awaited update is the Terra (LUNA) blockchain protocol, which uses fiat currency-indexed stablecoins like TerrUSD (UST) to create a global payment system.
According to data from Cointelegraph Markets Pro and TradingView, LUNA’s price rose 108% to $ 49.55 on October 4 after falling to $ 23.81 on September 21. The cryptocurrency’s 24-hour trading volume also reached $ 2.5 billion.
Behind the latest LUNA rally is the launch of the Columbus-5 update, which brings a burn mechanism to LUNA, the introduction of the IBC standard that opens Terra to the Cosmos ecosystem, and the increase in the number of DeFi implementations in the protocol and the total locked value.
Columbus-5 update done
The Columbus-5 update, which took place on September 30, represents the largest improvement ever made to the protocol, according to independent developers and analysts at Terra.
1 / Columbus-5 is now officially available as Terra’s new mainnet!
Welcome to the future of Terra https://t.co/EFnQnFr2lB
– Terra (UST) Developed by LUNA (@terra_money) September 30, 2021
One of the biggest changes that came with the update was changing the tokenomic model of the project. All LUNAs used to craft UST will now be burned instead of going to the community pool.
According to data from TerraLUNA worth $ 832 million burned in the first block of Columbus-5.
This change has put deflationary pressure on the supply of LUNA and could drive the price of LUNA higher in the long term as demand for UST increases.
Blockchain communication standard
The second reason behind LUNA’s upward momentum was the integration of the Inter-Blockchain Communication (IBC) standard, which allows the Terra network to communicate with protocols in the Cosmos ecosystem.
This integration will allow Terra and the UST stablecoin to gain wider adoption in the Cosmos ecosystem, making UST the stablecoin of choice for online applications and chains.
As more projects gain access to the UST, it could lead to further deflation in LUNA supply as it burns out in the process of creating the UST.
The total value locked up in the Terra ecosystem is increasing
One reason for LUNA’s price rally is the network’s growing decentralized finance (DeFi) protocols. The DeFi protocols helped set a record for the total value locked in the protocol.
The total value locked on the Terra network reached an all-time high of $ 10.07 billion on October 4, according to data from Defi Llama.
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