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How much LUNA has been burned over the past 30 days? How has the supply of UST changed over the same time period?
Overview
📌 What Is Terra (LUNA)?
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems. According to its white paper, Terra combines the price stability and wide adoption of fiat currencies with the censorship-resistance of Bitcoin (BTC) and offers fast and affordable settlements.
Development on Terra began in January 2018, and its mainnet officially launched in April 2019. As of September 2021, it offers stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik and the International Monetary Fund's Special Drawing Rights basket of currencies — and it intends to roll out additional options.
Terra's native token, LUNA, is used to stabilize the price of the protocol's stablecoins. LUNA holders are also able to submit and vote on governance proposals, giving it the functionality of a governance token.
📌 Terra's Role for UST
The LUNA token and UST are mutually dependent, as the success of the Terra ecosystem is a function of the adoption of UST as a stablecoin. LUNA backs UST and is burned when demand for UST rises. Following upgrades like Columbus-5, the supply of LUNA could become highly deflationary in the long run.
On the flip side, the value of LUNA can also decrease if UST is perceived as unstable. UST briefly lost its peg following the Wormhole hack, leading to a temporary price crash for LUNA.
Terra has a supply of 1 billion tokens. If this number is exceeded, LUNA is burned until it returns to the equilibrium supply level. New LUNA tokens are minted through the protocol's algorithm, as needed, in order to maintain the price of Terra stablecoins.
According to the above chart, the trend of burning Luna to UST has been ascending in the past 30 days and its highest level had been on February 24.
Total amount of burnt LUNA to UST is about 13M in last 30 days.
As we expected, with the increase in Luna burning, the supply of ust have been increaseing too and it has reached to 13.39B in 2022-03-02.