Luna means moon in Latin. Sudden drop in price of Luna can affect the entire ecosystem of Crypto. So crashing Luan can be said as Moonfall for mankind.
I do not know the exact reason why Luna price falls. But there are some estimation about this event.
- UST unpegged
- The is no upper capped for Luna token mint
UST and Luna are from Terra blockchain. Previously UST is pegged with Dollar. That means 1 UST worths 1 Dollar. There may be a price difference when it was pegged. But now there is no pegged so its value can not be close to one Dollar.
UST unpegged can make a lot of people panic so they start selling Luna. They have no trust for Luna so this is the start of Luna falling event. We can say that trust in crypto is very important.
There are many informatic posts if you want to know more about this event. I am reading and learning from them. Those people can explain better than me.
- Once Possible Way Terra's UST Lost Its Peg by mawit07
- Luna's collapse has brought down the entire decentralised economy by melbournewest
- Terra Woes Worsen Despite $1.5 Billion Bailout From Luna Guard Foundation by xabi
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