Terra (LUNA) Collapses Within A Day: What Should You Know About The Columbus-5?

Earlier, the price of Terra’s was at its peak of $41.48, and at the moment, it markedly slumped to $38.50, losing 7% within a day. However, LUNA includes the launch of the Columbus-5 upgrade, which introduced the LUNA incineration mechanism, the adoption of the IBC standard by the protocol, which opens Terra to the Cosmos ecosystem, and an increase in the number of DeFi applications and the total cost locked on the protocol. Columbus-5 was launched on September 30, and according to Terra developers and independent analysts, the update is the most significant development of the protocol.

Following, one of the notable changes that occurred with the update was the modification of the tokenomic model of the project, which led to all LUNA used to mint UST being burned instead of entering the public pool. According to Terra, $832 million worth of LUNA was burned in the genesis block of Columbus-5. This change has led to deflationary pressure on LUNA’s supply, and it may help raise its price in the long run as demand for UST increases.