Terra, an open source blockchain platform for algorithmic coin stacking, has been on fire for the past six months or so. Terra’s native cryptocurrency (LUNA) has surged in price from $24 to over $100 in the past six months, making it one of the top 10 cryptocurrencies by market cap.

And while LUNA showed minor corrections here and there, the coin and the Terra project as a whole continued to grow from strength to strength. As of now, on March 4, LUNA Ether (ETH) has reversed in terms of total staking value, locking in $29.5 billion worth of LUNA on the platform, compared to $25.9 billion of ETH.

What’s more, Terra’s raw data shows that there are currently over 230,000 stakes in the ecosystem, making it the second most invested cryptocurrency, more than four times the number of those investing in ETH (54,768). Finally, in terms of annual reward for effort, LUNA offers an average annual return of around 6.62% while ETH generates 4.81%.

With LUNA skyrocketing over 350% over the past 12 months, some smart people still have to argue that Terra’s said growth could be unsustainable. In fact, people connected to the ecosystem – pros and cons – have made huge bets on where to buy LUNA this time next year.

The Million Dollar Bet That Makes the Terra Community Fuss
With LUNA skyrocketing over 350% over the past 12 months, some smart people still have to argue that Terra’s said growth could be unsustainable. In fact, people connected to the ecosystem – pros and cons – have made huge bets on where to buy LUNA this time next year.

Crypto trader “Sensei Algod” alias “Sensei Algod” is so bearish on Terra that he recently bet $1,000,000 that LUNA would trade at a lower price by March 14, 2023 than on the above date. priced at $88. It was quickly passed on to Do Kwon, CEO and founder of Terraform Labs, the company behind Terra, who also paid the same amount and stated that the cryptocurrency would definitely trade above $88 at that time.

As conversations escalated between the two on Twitter, the duo finally decided to seek the services of Kobe, the co-host of the UpOnly crypto podcast, who acted as a deposit agent, facilitating the entire transaction. To illustrate, Kwon and Algod opened a total of $1 million in Tether (USDT) in an Ethereum address called “Cobie: LUNA Bet Escrow.”

Kobe: LUNA Bet Escrow. Source: Eterskan.
Kirill Nikolov, head of DeFi strategy at Nexo, a blockchain-based lending platform, told Cointelegraph that while such games can get a lot of attention, they don’t make much of a difference in the big picture. He added that the developers will continue to develop Terra regardless of the LUNA award or whether Do Kwon loses the bet.

A similar view is shared by Derek Lim, head of Crypto Insights for crypto exchange Bybit, who told Cointelegraph:

“I don’t think we can or should look into it much. It would be an exaggeration to think that these efforts between private parties could mean anything sly or optimistic. Instead, we should focus on other factors such as project sustainability. and the return of the reserve.
Daniel Santos, CEO of Woonkly, a decentralized finance (DeFi)-based social network, believes these efforts demonstrate the growing popularity of LUNA. He told Cointelegraph: “The more popular the project, the more fans and haters it has. The hater made a bet on LUNA, and the founder of Terra agreed to the bet, and why not – it’s that simple, he told Cointelegraph.

Is Terra’s growth really sustainable?
While Terra’s growth looks very impressive on paper, especially since LUNA outperforms ETH in terms of share value and number of partners, Nikolov noted that there is a big difference in the staking model for the two projects, given the inability of investors. To revoke their efforts, ETH and its rewards have been released on Ethereum 2.0. “Therefore, it is only natural that only a small percentage of the total ETH is invested compared to LUNA,” he added.

In addition, Nikolov noted that Terra did a good job acknowledging that floating staking solutions are needed to create stable and complex demand that can be used as collateral going forward, adding:

“Once the Eth2 merge is complete, we can expect the ETH rate percentage to be equal to the LUNA rate, with floating rate solutions like Lido playing a major role in creating interest in ETH staking, for example as collateral) .

Source: CoinTelegraph

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