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.
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.