UST Supply And LUNA Price

This dashboard tracks and analyzes the relationship between UST supply and Luna price.


Taking a leaf from Ethereum’s EIP 1599, Terra proposals 133 & 134 were introduced to burn LUNA tokens. As part of a popular proposal, the Terra community voted to burn about 88.7 million Terra (LUNA) tokens, valued at about $4.5 billion, and mint about 4 million to 5 million TerraUSD (UST) tokens. Burning, or removing the tokens permanently from circulation, took place over the course of two weeks, starting with a burn of 520,000 LUNA on November 9th. 

Our goal with this post is to track and analyze the relationship between UST supply and Luna price. It should be noted that any changes to the LUNA price and UST supply after the Burning LUNA period will be noted here.

As one of the goals of burning LUNA was to increase UST supply in the ecosystem. In the first week after the LUNA burn (Nov9,2021 – Nov15,2021), we can see a slight increase in LUNA price and also on UST Supply too .As a result of achieving the goal of burning LUNA, we can expect there to be a good amount of increase in UST supply after the LUNA burn was complete for the first week.

The LUNA price went down after the UST supply was increased from Nov 14-21,2021. Starting this week(Nov14-21,2021), we will receive lower LUNA prices when the UST Supply is up.According to this point of view, we can say that when UST supply is more, LUNA price will decrease. But it might be wrong assumption .

From the above analysis after Dec2,2021 both the UST supply and LUNA Price were on increasing trend. On Dec 5,2021, we can also see that the UST Supply will also increase after the Luna Price reached its maximum of $71.69 on that day.

  • Analyzing the past 90 days of LUNA price and UST supply, we find that LUNA prices increased twice while UST supplies increased three times. Accordingly, both LUNA price and UST supply were proportional to each other.
  • As well, we can assume that the rise of UST Supply in a given period(Past 90 days) was a result of burning LUNA, which means that one of the goals of burning LUNA has been reached.

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