LUNA rises above $50,000 in price of its native token

The Terra project and its native token LUNA have quickly moved from the sidelines to the forefront of DeFi. With over 1.9 billion in TVL, it is the fifth largest project, behind Avalanche.

LUNA saw its price increase by over 50% in the past week, with industry insiders believing that this is just the beginning of a bull run set to take place in the next few weeks.

After Bitcoin took a huge hit last week, dropping dangerously close to its coveted $50,000 resistance levels, the rest of the market went into the red. The major drag downwards doesn't seem to have affected LUNA, the native token of the TerraBlockchain.

The Layer 1 platform has risen quickly from the sidelines to the forefront of DeFi, riding a wave of interest in its innovative stable coin products. Users can swap their LUNA token for a wide variety of stable coins pegged to different fiat currencies. A decrease in the supply of stable coins on Terra decreases the circulating supply of LUNA, so it raises its value, because minting $1 worth of UST requires burning $1 worth of LUNA.

Over 3.2 million registered accounts and 15.3 million UST in tax rewards have been distributed in the past year because of this simple proposal.

The proposal to burn 88.7 million LUNA token, worth roughly $4.5 billion at the time, was passed by the Terra community earlier this month. The burn was to mint between 4 and 5 million terraUSD UST, a decision analysts believe would boost interest in Terra.

The token saw its price increase by over 50% since last week, which was a result of a slew of new proposals set to be approved by the community.

The ultimate goal for all of the proposals is to have UST become the go-to interchain stable coin. This process is set to begin by increasing UST liquidity on Curve Finance, the premier AMM for stable coin swaps, through a 6 month incentive plan through several Terra apps.

The annualized stake return for the token went from 4.61% at the beginning of November to 10.74% at the end of the month due to all of the previous LUNA burns.

According to Nicholas Flamel, one of the prominent Terra community members, we are about to see an even bigger increase in the price of LUNA in the coming weeks.

Flamel believes that UST will reach $10 billion in market capitalization by the end of the year, which is the goal of both the Terra community and its development team. The Terra ecosystem is about to go parabolic, as minting 1 UST requires burning $1 worth of LUNA.