Amidst the splendid Terra blockchain (LUNA), the CNBC Make It project points out the main risks that could be associated with the token.
- LUNA performance may be affected by reliability of UST anchors and regulatory issues
- Is Terra the new Ethereum?
CNBC’s educational platform, CNBC Make It, posted a lengthy explanatory read to discuss the possible pros and cons of Terra (LUNA) that enthusiasts should consider while holding the token.
LUNA performance may be affected by reliability of UST anchors and regulatory issues
In his interview with CNBC’s Taylor Locke, Matt Hougan, chief investment officer at Bitwise Asset Management, named two main groups of risks associated with buying and holding Terra (LUNA), a core native asset of the platform. – Terra high performance blockchain form.
Terra is “hot among the cool kids right now” because her Luna token has hit an all-time high. Here’s what investors need to know https://t.co/gFiE0IzpaL
– CNBC Make It (@CNBCMakeIt) December 27, 2021
First, Terra’s UST stablecoin is expected to maintain its 1: 1 peg against the price of the US dollar. As LUNA tokens are used in UST mechanisms, the performance of the two assets can affect each other.
Then the regulatory issues with stable coins should also be considered by potential investors. The CNBC speaker recalled that Terra’s company, Terraform, is currently under investigation by the United States Securities and Exchange Commission.
The watchdog investigation is linked to Terraform’s Mirror Protocol, which is a platform for synthetic assets. The SEC has filed a lawsuit against Terraform over whether it is selling unregistered securities.
Is Terra the new Ethereum?
As covered by U.Today previously, Terra and its token, LUNA, are in the spotlight in the fourth quarter of 2021. Recently, LUNA crossed the $ 100 mark and exploded into the top 10 assets by market cap.
Yesterday Mike Novogratz, CEO of Galaxy Digital and seasoned Bitcoin (BTC) supporter, recommended CNBC to replace Litecoin (LTC) with LUNA and SOL in its ticker board.
Both platforms fascinate him with their strong community activity and the interest dApp developers have shown in building on top of Terra and Solana.