Luna, had about 360Million coins in circulation a few days ago but now there are more than 6,500,000,000,000 coins available….!
With no actual fixed maximum supply, the founders of coins like LUNA issue constantly new coins and sell them to unsuspecting buyers who think that they are buying a “crypto”.
So Terra LUNA crashed because it is not a real cryptocurrency. It has no relation with the original crypto idea and it is a completely centralized digital asset.
Even its blockchain was halted (this is impossible for a decentralized network like BitcoinZ, Bitcoin or Monero).
Terra / LUNA, once in the top 10 of the crypto capitalization list, crashed more than 99% from its all time high and its holders saw their portfolio being destroyed in a few days. This event caused a general cryptocurrency bloodbath as reaction.
Many crypto-analysts tried to explain it saying that Luna was attacked by people who massively sold its TerraUSD (UST) stable coin. This UST coin was supposed to be pegged 1:1 with the dollar value. Even Binance, the popular exchange, announced that as a result, there is a “high volume of pending Terra network withdrawal transactions” on its exchange, in a sign that investors are rushing to sell LUNA.
However nobody explained the real reason of the crash, probably because the most “crypto” projects are accomplices in this….Luna’s crime.
Which is the real reason of the crash? Will Luna recover or more assets are going to follow?
The real reason of the crash, like the title reveals, is the fact that LUNA like the vast majority of the self proclaimed crypto today, are Centralized assets that have very small or no relation at all with the original cryptocurrency idea.
Luna, like BNB, XRP, ADA, SOL and many of the most popular “cryptocurrencies” are 100% premined (created without the mining procedure) and their founders issue coins out of thin air, allocating them in their pockets before selling them to the market. Even the rules that are associated with these coins and their tokens are not immutable and they can be changed.
Luna, had about 360Million coins in circulation a few days but now there are more than 6,500,000,000,000 coins….!
With no maximum supply, the founders of coins like LUNA issue constantly new coins and sell them to unsuspecting buyers who think that they are buying a “crypto”.
Luna cannot recover after this rug pull because the buyers have not realized that all the coins that have now bought are already 20,000 (20 thousand!) times more than the number of coins that were available when the “asset” was priced at around $117. So no, your Luna coins will never rise again more than very few cents in the best scenario.
In simple words, the founders of Luna like those of the most “crypto” today act as Central Authorities, they create coins out of thin air for them since there is no mining procedure required, no immutable rules, no Decentralized network. They literally steal the funds of the buyers by creating new projects and they repeat this procedure again and again.
Of course all these have no relation with the original cryptocurrency idea that Bitcoin introduced. Only a handful of other pure crypto like BitcoinZ, Monero and Digibyte took this idea in the next level without breaking it. They offered advantages like higher transaction speed or privacy and these assets are mineable, completely Decentralized and have immutable max supply like Bitcoin did. Here you can find a video guide with 10+1 tips how toavoid traps with crypto.
Unfortunately , most people tough fell victims of the “new wave” of the the so called “DeFi” assets after 2018. The fraudulent founders of these assets as it was aforementioned, with the funds that they get by premining all the coins and constantly launching new projects, get only richer and they pay for marketing tricks that attract more buyers in a vicious circle.
In this fashion we ended with the few real cryptocurrencies being drown in a sea of thousand scam assets that pretend to be crypto while actually they defame the original cryptocurrency idea. Like it happened with Luna and its infinite number of coins that are sold in the market now. The oxymoron is that the top100 places are monopolized by many of these scams while the few real cryptocurrencies tend to be mostly unpopular (with BTC being the only exception).