The crypto market, in general, has been moving sideways for a couple of days, but not LUNA, the token of Terraform Labs, which grew by 60% over the previous week. In fact, it surpassed several of the most recent top performers, such as Avalanche, Polygon, and Shiba Inu.
Currently, LUNA is trading 9.58% higher and has reached a new ATH of $69.38 while its market cap sits at 26.8 billion. LUNA is now close to entering the top ten of the biggest cryptos by market cap with just Dogecoin on the list.
This increase for LUNA is a result of the optimism regarding the potential that dApps are showing with the usage of LUNA in these blockchain applications being the reason behind it.
Santiment, the on-chain data provider, stated: “Terra has been on a tear for most of Q4, and is up an astounding +76% against the #Bitcoin‘s price since November 24th. Also encouraging is the upward long-term trajectory of $LUNA‘s development activity rate, with rising #github submissions over time.”
The DeFi ecosystem of Terraform includes several popular apps, like Anchor, Mirror, and Pylon.
Recently, Terra has released a new governance proposal with the goal of destroying and burning almost 88 million LUNA coins from the community pool and swapping it for UST, the native stablecoin of Terra.
It didn’t even take a month for the market value of UST to grow three times from $2.9 billion to $7.7 billion. This deflationary tactic of reducing the supply has increased the price of LUNA.
The head of communications at Terraform Labs, Brian Curran, stated:
“Mostly everything we do as a company supporting the Terra ecosystem and third-party projects that build and develop creates more demand for UST, closing the ‘demand loop’ with many use cases for UST ranging from payments, to savings, and investing. As a result, Luna’s price dynamics are mostly a function of the demand for UST, and by extension, the demand for using UST across various applications and blockchains.”