UPDATED 11.05.2022 Terra (LUNA) crashed even deeper, sinking below $5. UST broke away from its peg within hours, sinking to $0.35 with little chance of returning as a dollar-pegged asset. This may make game rewards difficult to cash out, while games may abandon the Terra ecosystem and move to other blockchains.
Terra was one of the blockchains that grabbed attention in 2022. The reason was that LUNA, the native token of that network, was seemingly immune to breaking down. Terra claimed to create a disaster-proof economy, backed by LUNA and later, Bitcoin (BTC).
Terra also produced UST, a new token valued at exactly $1. The goal was to use LUNA and BTC collateral to ensure UST would sway by 2% at most. But this mechanism totally failed on May 9, when UST crashed to $0.68 and Binance had to suspend trading, deposits and withdrawals.
Is Terra a Gaming Blockchain
Terra was mostly supporting decentralized finance, but the boom in games also invited P2E projects.
Monsterra is one of the games coming soon to the Terra network. For now, Monsterra is in the testing stage and will offer access through a Terra wallet. The game is not actively using a P2E model yet, and will be shielded from the price fluctuations of LUNA.
Additionally, the game uses Tether (USDT) instead of UST in its rewards and special events, thus avoiding the loss of value.
Another project that relies on UST is the PlayNity gaming guild, with Terra, BSC and Ethereum versions.
The game may have problems with its pricing mechanism, as its items are denominated in UST. However, the de-pegging of UST has a chance to recover and help the product continue. The project has not yet stopped its NFT market due to the UST price anomaly.
Another game, Astro Hounds, has signaled dissatisfaction with its Terra technology and LUNA market price.
Astro Hounds is a simulated dog racing game with breeding mechanics. The game uses a model similar to Pegaxy, but has a more detailed approach to NFT creation. Players can create custom NFT. For now, HOUND is not a traded asset, and the price of LUNA and UST are not affecting the game’s development.
P2E games can always relaunch on another network, and in a worst-case scenario, Terra may lose its credibility and cause a shock among startups that intended to launch on its network and use UST for liquidity.