WazirX, CoinDCX and CoinSwitch Kuber delist Terra's stablecoins from their platforms

WazirX, CoinDCX and CoinSwitch Kuber delist Terra's stablecoins from their platforms
Terra LunaCanva
  • Terra has two tokens, calle UST and Luna.
  • The UST token is a stablecoin whose price is maintained using the Luna token.
  • The value of these tokens have fallen massively in the past month, with Luna approaching zero.
Indian crypto exchanges are following their global counterparts, and delisting the stablecoin Luna. At the moment, WazirX, CoinSwitch Kuber and CoinDCX, two of the top exchanges in the country in terms of trading volumes, have delisted the beleaguered tokens from their platforms, after prices of the stablecoin fell to nearly zero over the past seven days.

The Terra crypto token was trading at around $80 on May 5, according to Coinmarketcap, but its value had dropped by 99.98% to around 5 cents at the time of writing. The platform itself has halted the blockchain, and Coinmarketcap warns users that there’s extreme volatility in the token right now.

WazirX, CoinDCX and CoinSwitch Kuber delist Terra's stablecoins from their platforms

“The Terra blockchain has officially halted at block 7607789. Terra Validators have halted the network to come up with a plan to reconstitute it. More updates to come,” the company tweeted through the Terra Twitter account, today. The token’s market cap has fallen from $30 billion to around $6 million in the meanwhile.

What is the Terra token and why did it fall?

The Terra ecosystem has two tokens, UST and Luna. Through a process called arbitrage, the Luna token is used to keep the UST stablecoin’s value pegged to one dollar. Through this, the company was able to keep the price of UST pegged to a dollar, while it earned profits through Luna, and also didn’t have to keep a reserve of USD at all times.

The platform’s in-built algorithms track supply and demand of UST and Luna, and are designed to balance the two systems.

The system sort of disintegrated earlier this month, when a broad sell-off of both UST and Luna tokens by investors led to big drops in both their prices. The developers of the Terra blockchain announced, at the time, that they would start buying Bitcoin in order to build a reserve for themselves.

This, evidently, didn't work.

What happens to your Luna tokens?

To be sure, the Luna and UST tokens were both pretty cheap in INR terms, when compared to top cryptos like Ethereum and Bitcoin. The two cryptocurrencies, hence, may have been purchased by many in India as well.

At the moment, the Terra blockchain has been halted, which means that trading in these tokens will not be possible, even through P2P trading. That said, some exchanges will allow users to withdraw the fiat values of these tokens.

“We will enable Binance free transfer for users to withdraw their Luna funds," WazirX said in a statement on May 13, for instance. The platform is delisting Luna/USDT, Luna/WRX and Luna/INR pairs.

CoinDCX, too, has said that it’s delisting both UST and Luna tokens with immediate effect. “Kindly note that users can continue to trade the above assets using other trading pairs available on CoinDCX Pro and CoinDCX Web Platform," the company said in a statement.

On the other hand, CoinSwitch Kuber said that it will have “enabled a window” for users to sell and recover “some value” from their investments. The window will close at 5pm on May 13.

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