LunaSince the demise of Luna crypto tokens based on the Cosmos ecosystem has suffered significant losses

So-called stablecoins are sending shockwaves through the cryptocurrency markets, wiping billions off their value, causing liquid cryptos such as Bitcoin to crash and people to lose their savings. The sharp crash in Luna, the sister cryptocurrency of algorithmic stablecoin Terra, which has rendered it almost worthless, has sent shockwaves throughout the cryptocurrency market, with experts likening the crash in the crypto market to be as severe as the big financial crisis of 2008. The near-collapse of these stablecoins, considered to be comparatively safer investment bets within the crypto universe, has also prompted regulators and authorities to call for stricter laws governing these financial assets. 

Since the demise of the blockchain project native token Luna and the algorithmic stablecoin Terasd (UST)  crypto tokens based on the Cosmos ecosystem have suffered significant losses. Two months ago, the top Cosmos ecosystem coins were collectively worth US$61.6 billion and since then, the value of the Cosmos economy has fallen by over 75%, dropping to US$15.2 billion. 

Blockchain Project Terra is a Cosmos-based network, which leverages consensus protocol Tendermint, the Cosmos SDK, and the Inter-Blockchain Communication Protocol (IBC). Tera’s network consists of a native token called LUNA and a suite of algorithmic fiat-pegged tokens such as TeraSD (UST). 

Stablecoins claim to be a relative haven in the highly volatile crypto market. They are meant to be tied to a fiat currency and usually maintain a 1-to-1 peg with the US dollar. But recent events have proven that they are just as volatile as other cryptocurrencies. 

It's worse for Luna holders. The value of Luna tokens has almost completely disappeared: After reaching a high of just under US$120 in April, Luna's current price is a fraction of a penny. To that effect, Cronos (CRO) changed hands for US$0.38 two months ago and on May 16, 2022, CRO traded for US$0.19 per coin. Cosmos (ATOM) traded for US$28.95 per unit on March 7, and today a single ATOM trades for US$11.27 per coin. While LUNA was the top Cosmos-based token two months ago, today the largest Cosmos ecosystem token market cap is held by CRO with its market cap around US$4.95 billion on Monday.

ATOM currently holds the second-largest position with its US$3.2 billion market valuation and Luna is the third-largest Cosmos ecosystem token with its US$1.44 billion market cap. Other notable Cosmos ecosystem tokens that follow Luna’s market valuation include thorchain (RUNE), osmosis (OSMO), and Kadena (KDA).

While the Cosmos token ecosystem took a beating from the Terra implosion, most of the value lost within the past two months took place last week. The Cosmos token economy has grown since May 12, 2022, as the market valuation was around US$11.8 billion that day. The value of the Cosmos token ecosystem has increased by 28.81% since May 12, but the price increase did not go to Terra’s LUNA. On May 12th, LUNA was trading at US$0.013 which is 98.35% lower than what LUNA traded today.