Terra is a decentralized financial payment network that rebuilds the traditional payment stack on the blockchain. Luna is the reserve currency of the Terra platform. It has three core functions: i) mine Terra transactions through staking, ii) ensure the price stability of Terra stablecoins and iii) provide incentives for the platform’s blockchain validators.
Du Jun, CEO of Huobi Global he told Cointelegraph that the fall of Earth ralentizará el entusiasmo de los inversores a corto plazo, pero a largo plazo, la demanda se recuperará.
Many are fearful that, as happens with dominoes when you put them in a row and push the first one over, the whole crypto ecosystem will collapse (or fall even further) along with Earth.
However, there are those who do not think so.
For the CEO of Huobi Global, Du Jun, the collapse of Earth is not a risk to the broader crypto ecosystem.
In an interview with the media Cointelegraph, Jun explained that the collapse of Earth will affect the entire crypto ecosystem by slowing investor interest in cryptocurrencies as an asset class. However, Jun pointed out that this will only be a short-term effect . In the long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. term, the exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. CEO explained that the demand for cryptocurrencies like Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. (BTC) as a hedge against fiduciary inflation a general increase in prices and fall in the purchasing value of money. will grow along with the arrival of new applications for Blockchain:
“A largo plazo, la demanda de criptomonedas como cobertura contra la inflación fiduciaria seguirá creciendo, así como para las aplicaciones de la tecnología blockchain”.
Jun pointed out that falls such as that of Earth also occur in many other industries, not just crypto.
“Market crashes and coordinated attacks are not unique to cryptocurrencies.” Citing the collapse of Lehman Brothers and the housing market an area or arena, online or offline, in which commercial dealings are conducted. crash, Jun mentioned that “all industries will see their fair share of players ousted.” . He further explained that the long-term resilience of an industry always depends on the demand for its services:
“Cryptocurrencies as a technology and asset class introduce value and innovation that are unique and irreplaceable, and we believe that a short-term bad apple will not affect the long-term demand for cryptoassets and the industry as a whole.” .
Even though it can be seen in Cryptomarkets that the crypto market continues to see declines between 2% and 15% for the major cryptocurrencies, Jun is optimistic that when the price of BTC recovers, confidence in the market will return and generate more investment in the space. Also, the CEO is confident that the crypto industry in general will grow continuously.
The failures of Earth
In addition, Jun noted that there are flaws exposed by the collapse of the Terra. “The bottom line is that, in the future, stable coins should be backed by less volatile tokens.” he said. He stressed that the guarantee must be “rebalanced with less volatile tokens”.
Finally, the CEO of Huobi Global he said, in short, “stable decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. currencies are vital for the development of the entire cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. ecosystem.” He shared that the community can turn this loss into a victory by innovating so that tragic incidents like that of Earth not be repeated.
Earlier this month, the parity with the US dollar collapsed when a whale a term used to describe investors who have uncommonly large amounts of crypto, especially those with enough funds to manipulate the market. began to dump a sudden sell-off of digital assets. UST. This reduced the price of LUNA by 20% just one day after the initial spill. Then, the event snowballed even as Terra’s founder, Do Kwon, shared plans for the recovery of Earth. In the end, the debacle of Earth became one of the biggest price collapses in the history of cryptocurrencies.
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