In 2018, Do Kwon, to revolutionize modern financial structure started Terraform labs. He launched Luna cryptocurrency the same year, and later in 2020 company started selling TerraUSD, naming it stablecoin. They were secured to the value of the safer currency, usually the dollar, so buyers may always get a one-to-one exchange rate. In no time, Luna’s value swelled up, creating a community called “Lunatics”.
But everything went opposite to the name “stablecoin”. Almost three weeks ago, Terra Cryptocurrency and stablecoin crashed like a castle of cards sending ripples of shock in the crypto market. After the crash, the Terra Life Foundation Guard deployed around $1.5 billion in resources to help stabilize LUNA. However, all efforts went in vain. The assumed loss of such a collapse in the broader crypto market is expected to be around $40 to $60 Billion.
Launch of new trading coin LUNA 2.0
To breathe new life into the Terra ecosystem, Do Kwon and his company, Terraform Labs, have relaunched the Terra network with a new blockchain and Luna coin.
Terra Classic (LUNC) – formerly Terra – cryptocurrency and TerraClassic USD (USTC) – formerly TerraUSD (UST) – stablecoin have introduced Terra 2.0 (LUNA) in a bid to recover from the devastating crash that slammed both of their tokens, costing investors millions of dollars.
Coming up with the revival strategy Do Kwon, founder of Terraform Labs, is conducting an ‘airdrop’ which in the crypto world is known as putting free crypto coins in their wallet. They are distributing free Luna 2.0 into the wallets of original TerraUSD and Luna holders based on the ratio determined by the company to compensate for the loss of the investors.
The coin has replaced the old Luna cryptocurrency and trades under its ticker symbol, LUNA. The old Luna coin can still be traded under a new name Luna Classic, and it is listed as LUNC on crypto exchanges. The new Terra blockchain does not include stablecoin.
Find out more about Terra Ecosystem Revival Plan by clicking here.
However, the introduction of Terra 2.0 did not go as planned, and the coin plummeted after a quick jump to $19.54 shortly after the launch. It hit a low of $3.63 just hours after its debut and is currently trading at $7.09. LUNA was listed on multiple large exchanges, including KuCoin, Bybit, FTX, and others, despite its popularity. The immediate fall of 75 per cent after its launch gives the direct impression that rebuilding the faith won’t be an easy task.
Binance CEO Changpeng Zhao said- “We’ve been working hard to serve the Terra community over the last few days. In my tweets, I’m only pointing up potential difficulties based on my current knowledge. Minting and forking do not add value to a coin. Buying back and burning is a viable option, but it necessitates finances. Funds that the project team might not have access to.”
John Kramer, director of trading at crypto market maker GSR, commented, “Some investors are still holding their new Luna 2.0 tokens since the new Luna token is still very “illiquid”. The tokens’ remaining holders are likely viewing it as a call option on the relaunched network’s possible success, refusing to sell for pennies on the dollar compared to their previous value.
Faidi Aboualfa, head of research at crypto prime brokerage Copper stated that – “Clearly, it’s a game of chance. Terra’s reputation has been ruined as a result of the fire that has engulfed its village. Whatever they do here is a waste of time.”
Binance listed the new LUNA.
On Tuesday, the largest crypto trading platform Binance listed it. The new LUNA token was added to Binance’s Innovation Zone, which collects cryptocurrencies that “represent a larger risk than other tokens.” This is the platform’s approach of warning customers that investing in particular tokens should be done with caution.
After falling to $3.80, there is a 50% increase in the trading price of LUNA 2.0, which is a massive comeback. At the time of writing price of LUNA 2.0 is $7.19 with a current market capitalization of 0 USD. It is still 54% away from its initial trading price. The 24-hour trading volume is $638.99M.
What does the future hold for Terra 2.0?
Investing in volatile crypto-like new Luna is still a risk. Investors are rushing out of Luna after securing an airdrop. Terra 2.0 is based on a decentralized structure, and it is achieved through voting, so it can be potentially better as compared to its predecessor. It is still experimental. With the massive loss of trust, Luna has to make a long run to regain its status.