Luna (LUNA), which has been in freefall along with its related stablecoin TerraUSD (UST), fell below $1 on Wednesday.
Luna is currently trading at $0.86 at 9am ET, down 97% from $31.06 just 24 hours previously, according to Binance data. The token has fallen as low as $0.69 in the last 30 minutes.
The entire Terra ecosystem is coming under pressure as holders unload Luna and TerraUSD.
TerraUSD is the algorithmic stablecoin that is meant to maintain parity with the US dollar through a combination of burn mechanisms involving Luna. A Luna holder can always swap $1 worth of Luna for one TerraUSD, meaning if TerraUSD falls below $1 more Luna is created to make TerraUSD more scarce and bring the price back up to its $1 peg.
However, the stablecoin lost its peg on Saturday and again on Monday jeopardizing the whole ecosystem. As such when people sell large amounts of TerraUSD, putting downward pressure on the price, more Luna will be printed and supply could increase exponentiall