In relation to the fact that the Korean coin, Luna, which was ranked 10th by market capitalization, has effectively become a piece of paper, the Korean representative of the company that issued it acknowledged the failure of the coin issuance.
The cryptocurrency market is being hit directly by the so-called ‘coin run from kimchi coin’ with large-scale withdrawals due to Luna’s aftermath.
Reporter Kim Sang-woo on the sidewalk.
Luna and Terra, also called kimchi coins, are virtual currencies issued by Terraform Labs, a blockchain company founded by Koreans.
Terra is designed so that the value of each coin is pegged to one dollar. It gives you some sort of interest of up to 20%, attracting Terra while maintaining its value by regulating the supply of Luna through an algorithm.
This method is different from maintaining value by issuing coins with safe assets such as cash or government bonds as collateral.
[권도형 / 테라폼랩스 대표 : (가격이 고정된 가상화폐)스테이블 코인은 화폐가치 변동에 안정적이라고 생각합니다.]
Luna, which was ranked in the top 10 by market capitalization, was around 100,000 won at home and abroad until the 1st of this month, but now it is around 1 won, which is a piece of paper.
As Terra went below $1, its sister coin, Luna, plummeted, and it was caught up in the so-called ‘death vortex’ in which Terra plummeted.
[박성준 / 동국대 블록체인연구센터장 : 메커니즘의 지속 가능성 문제가 생긴 거에요 그게 이번에 시장이 잘 나갈 때는 보통 문제가 안 생기는데 시장이 잘 안 나갈 때는 회사 입장에서도 20%의 이자라고 할까 보상금을 감당하기가 쉽지 않습니다.]
The 30-year-old CEO of Terraform Labs, a former Apple engineer and Korean, apologized on Twitter, acknowledging that his invention had failed a cryptocurrency project.
At the same time, the ‘Terra Ecosystem Resurrection Plan’ was also released, which was flooded with complaints online, such as “I lost all my life’s savings”.
Domestic virtual asset exchanges, such as Upbit and Gopax, took measures such as delisting or suspension of trading for Luna and Terra, and major global cryptocurrency exchanges such as Coinbase took similar measures.
As large-scale withdrawals, or coin runs, continued due to the Lunar storm, Bitcoin and Ethereum fell by more than half compared to six months ago, and the virtual currency market is being hit directly.
As a result of this crisis, the claim that cryptocurrency is a hedge against inflation is being shaken.
This is YTN Kim Sang-woo.
YTN Kim Sang-woo ([email protected])
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