Billions of Luna minted as supply grows 20-fold in four days

– The supply of Luna (LUNA) has increased by more than 20 times over the last few days, as the effect of TerraUSD (UST) losing its peg to the US dollar continues to take its toll.
– This massive supply increase has accelerated the fall in Lunas price, which is down 99% in the last two days.
– The price of Luna is falling because UST holders are trying to cash out through Luna, using the mechanism designed to keep the peg in place.
– When this happens, more Luna is minted in response to the amount of UST being burned.
– As holders redeem UST for Luna, they increase the supply of Luna and likely sell these tokens on the market.
– Terraform Labs is backing a few proposals to try to rescue the ecosystem.