It took only seven days for the Terra (LUNA) ecosystem to plummet, as prices plummeted from $85 on May 5 to almost $0 on Thursday. As the market gained clarity on what had transpired, LUNA’s trading volume saw a strong recovery of over 200% over the weekend.
As a result of the decoupling of TerraUSD (UST), which crashed the LUNA market, LUNA investors reflected on the price drop as CoinGecko recorded trading volumes declining to $178.6 million on Friday, a figure that it was last seen in February 2021.
Terraform Labs CEO and co-founder Do Kwon sought damage control on the same day he proposed a revival plan for Terra’s return, which involves compensating UST and LUNA holders for holding the tokens during the crash.
Despite the risks involved, Terra’s “crazy volatility” remains an attractive market for many short-term investors, mainly due to the fact that LUNA momentarily gained 600% in value on Saturday.
(just needs a few 100x more to get back to $1)
— Lucas Martin (@VentureCoinist) May 14, 2022
As investors try to recoup their losses while others try to cash in on Terra’s comeback, LUNA’s trading volume surged more than 200% to $6 billion. Before the crash, the LUNA ecosystem consistently recorded over $2 billion in trading volumes on average over the past two years.
However, just as LUNA prices fell between May 10 and 13 in the morning, its trading volume increased as investors tried to cut their losses, which ranged from $5 billion to $16 billion. At its peak, LUNA’s trading volume hit an all-time high of $16.15 billion on May 11.
Due to the various factors mentioned above, LUNA recovered its trading volume and is trading at $0.00025 at the time of writing. According to data from CoinMarketCap, cryptocurrency exchange Binance accounts for 68.26% of LUNA’s trading volume, followed by KuCoin at 9.52% and FTX at 1.13%.
Related: Crypto.com unblocks users, reverses failed LUNA trades that did 30-40x
On Friday, Crypto.com users raised concerns about the reversal of LUNA trades on the exchange’s mobile app.
Kris Marszalek, CEO of Crypto.com, later revealed that an internal error caused the system to display incorrect prices, leading numerous investors to collect 30-40x profits.
There were many customers who were buying at the wrong prices and of course some also took the opportunity to exploit the flaw to the fullest.
We reverse ALL trades.
Some customers saved a ton of $ and are thanking us, some didn’t abuse the bug and are attacking us.
— Kris | Crypto.com (@kris) May 13, 2022
As a result, Crypto.com temporarily blocked all users from trading. After a day of reviewing the alleged system failure, Marszalek informed everyone that “all user accounts have been re-enabled.”
As Cointelegraph reported, the company has offered $10 worth of its in-house Cronos (CRO) token as a goodwill gesture to affected investors.