Terra Luna Eclipse

In the world of crypto currency Terra Luna was a launch which redefined the scope of progress and potential for the alternative coins. The launch of Terra Luna happened in 2019 as a successful decentralized financial token. There however remains a wide confusion regarding a token and a coin in the digital world, a coin is one that has been formed for circulation in the block chain of the parent currency i.e. .the coin gets circulated in its own block chain network whereas a token is one which gets circulated in the block chain of other currencies .Terra Luna is one such token that has its operatability in multiple block chain’s. The launch of this token was done by the Korean firm Terra form labs through the sale of Luna coins to private equities. An approximated amount of $32 Million was raised through this operation which was transferred to Luna Foundation Guard reserve fund (LFG) created to maintain stability and equilibrium in the token value. The mechanism of operation was very simple and was referred to as burn and mint mechanism .To elaborate more Terra remains the main ecosystem and Luna the token in the system .Luna was pegged to UST or the Terra USD which was the stable coin in the Terra network. Thus in the ecosystem of Terra there is Luna which is pegged to UST (Terra USD).Thus the mechanism of balance or the balancing act is between Luna and UST. Thus UST is Linked to US dollar and hence the equation is 1 UST is equal to 1 Us dollar (1UST=1US Dollar) is to be maintained for the equilibrium to be established. Let us see as to how this balance is maintained, if 1 Terra UST=$0.095 it can be exchanged to buy Luna of 1 $(dollar).Here what happens is the buyer of UST makes a profit .005 and through this trade he gets Luna of 1$.The operative mechanism that works within is , when UST is used to purchase Luna the supply of Luna in the market increase and the supply of UST decrease there by creating excess demand for UST and hence bringing a parity of value between UST and Luna as 1.Thus Luna was kept as a volatile token to bring out a balance and UST was maintained a stable one. This mechanism of pegging was however unique as the usual format of pegging to either a crypto currency or Fiat currency was getting replaced by pegging to dual token system. The concept as well as the uniqueness of the token did bring quite a lot of attraction to the crypto as the value did sore high to all time highs. This stable situation of growth was negatively impacted during the first week of May when the value of UST and along with it Luna fell. The reason for the fall was definitely accounted to the unpegging of Dollar with Terra UST. Over flooding of Luna in the market let to a serious downfall in its value along with the UST that was seriously falling in value. Desperate mechanisms by the Luna Foundation (LFG) to save the BTC (Bit Coin) by infusing $1.5 billion of reserve Luna only aggravated the already worsened situation. It just took days for the eclipse to set in and the Terra Luna network went in for a darker phase. The title gets named as the eclipse as this a testing time and the Luna network is still working on efforts to revive the falling system from doom.