Indian crypto exchanges such as WazirX, CoinSwitch Kuber and CoinDCX have started delisting beleaguered token Terra (Luna) after nearly 100% fall in the digital asset in just under seven days.
Luna, which was quoting around $80 level till last Saturday was trading at $0.00002446 level on Friday afternoon, showing a near 100% fall in its value. The market capitalisation of the token slumped from around $30 billion to around $6 million during this period.
In a notification on Friday morning, WazirX, which is India’s biggest crypto platform in terms of trading volume, said that it will delist Luna/USDT, Luna/INR, and Luna/WRX pairs. “We will enable Binance free transfer for users to withdraw their Luna funds,” the exchange added. USDT is stablecoin tether and WRX is WazirX’s utility token.
This came after WazirX’s parent Binance on Thursday said that it will delist Luna/USDT contracts as the price slumped below the $0.005 level.
Another crypto exchange, CoinDCX, said that it was delisting UST and Luna from CoinDCX app with immediate effect. UST or terraUSD, which is an algorithmic stablecoin, is a sister token of Luna.
“Kindly note that users can continue to trade the above assets using other trading pairs available on CoinDCX Pro and CoinDCX Web Platform,” said CoinDCX, which is India’s highest valued crypto exchange.
The Terra blockchain was halted on Thursday after its token terra (Luna) fell in value to below 2 cents despite trading at about $80 one week ago.
Luna’s downfall started over the weekend when its sister token UST, which is a stablecoin, de-pegged from its $1 value after big investors started dumping millions of dollars’ worth of UST over the weekend.
A stablecoin is usually linked to an underlying asset such as the US dollar or a precious metal such as gold. TerraUSD is a decentralised algorithmic stablecoin, meaning rather than being backed by an asset, UST uses complex codes to create new coins or destroy old ones to maintain a steady price at $1.
All stablecoins have a governance token, which provides the stability. In the case of UST, it is Luna, which explains the correlation between both the tokens.
However, due the recent fall in the overall crypto market, UST failed to stabilise and hit a low of $ 0.0449 on Friday morning. The creators of Terra attempted to stabilise the token, but have failed in their efforts.
UST market capitalisation tumbled from over $18 billion to less than $2 billion since last Saturday.
“The current Luna fiasco is a great learning opportunity for the global crypto community as it has revealed the weak links within the algorithm-based stablecoin ecosystem. It is important to note that Terra network is one of the most tech-savvy in the crypto industry and Terra UST is a pioneer in the algo-based stablecoin race. The LUNA crisis reiterates the fact that crypto as an asset is highly volatile and investors need to trade with caution with a long-term horizon of 2-3 years to stay profitable,” said Charles Tan, chief marketing officer at Atato, a licensed Multi-Party Computation (MPC) crypto custodian wallet.