Information regarding Valour Terra (LUNA) SEK
The Terra (LUNA) token price, and as a consequence of this also VALOUR TERRA (LUNA) SEK, has today dropped by up to 96% compared to the closing price of yesterday evening.
The reason for this drop in Terra (LUNA) is that Terra network’s stablecoin Terra USD (UST) lost its peg, i.e. its exchange rate of 1:1 versus USD.
In the wake of a short period of time, the price of UST/USD went from 1.00 to 0.20 which has direct implications for Terra (LUNA) due the nature of this algorithmic stable coin. Smart contracts on Terra burn Terra (LUNA) when new UST are created. On the other hand, when UST’s get redeemed then new Terra (LUNA) coins are minted which leads to an increase of the supply of Terra (LUNA). In today’s case, Terra’s algorithm was not able to handle the flow of UST’s anymore which ultimately led to a sort of a bankrun on UST and the loss of the peg.
Due to the high volatility and the prevailing uncertainty around the Terra ecosystem, the trading in Valour Terra (LUNA) SEK is halted on the NGM exchange. It is Valour's intention to provide a market, through the market maker, as soon as it is possible and allowed. We keep a continuous dialogue with the exchange.
