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TerraUST’s crash was a wake-up call for many in the crypto ecosystem. The crash caused a whopping 280 billion dollars to disappear from the cryptocurrency market. Most now understand the fallacy of an algorithmically pegged cryptocurrency. Terraform Labs and Luna Foundation are under pressure to offer a way forward to the investors who have chosen not to send their LUNA to the burn wallet. The developers have finally launched Terra 2.0 as a way forward for the LUNA investors.
Do Kwon recently proposed hard forking the LUNA chain into Luna 2.0 and Luna Classic. After receiving overwhelming support for the new chain, Do Kwon finally launched Luna 2.0 (Terra 2.0) on May 27 2022.
Luna 2.0 was Launched on May 27
After the de-pegging of the UST and the crash of LUNA, the community came forward with several proposals to recover the project. Do Kwon, the president of Terraform Labs and the creator of Terra chain, came forward with proposal 1623. It proposes to:
- Rename the existing Terra Blockchain to Terra Classic,
- Rename the LUNA token to Luna Classic
- Forking a new Luna Blockchain
The community has approved this proposal with a 65% majority. Even though Luna was announced as a hard fork, Terraform Labs has stated that Luna 2.0 is a genesis chain.
“The difference to understand here is that a forked blockchain shares its entire history with the original chain, which Terra 2.0 will not,” Terraform announced.
The company has also clarified that Dapps of the previous blockchain does not already exist on the new chain. Developers must migrate those decentralized applications to Terra 2.0.
Investor Reactions are Mixed About the New Changes
Even though over 65% of the community accepted the proposal, not everyone was excited. Once, Terra was one of the largest blockchains, with LUNA being one of the top ten cryptocurrencies worldwide. LUNA and UST, both combined, lost $39 billion. Investors had stated that UST suffered the most loss as they couldn’t withdraw their tokens.
The cash withdrawal of UST sent Luna Foundation Guard into a panic as it tried to maintain UST’s peg by aggressively selling off its Bitcoin reserve. It caused a massive dip in BTC price – negatively impacting the crypto market, the worst of which was experienced by LUNA and UST.
Binance CEO, Changpeng Zhao, has commented that LFG wasn’t fast enough to leverage Bitcoin to repeg UST.
The scars of the crash are still fresh in the minds of the crypto community; they are wary about Investing in Luna 2.0. One user has displayed their concerns about the project’s long-term viability and has asked who in the right mind would invest in the new chain.
Other investors have said that the recent action of the new chain seems rushed, as the developers have not resolved the problems of the old chain. Those who’ve lost money during the UST collapse are yet to receive reimbursement.
Crypto Exchanges are Bullish on LUNA 2.0
Despite the community’s apprehensions, the crypto exchanges support Terra 2.0, including Huobi. Supporters also include OKX, who has said that it will support the LUNA token airdrop. Binance, FTX, Kraken, Kucion and Bitfinex are also working alongside Terra to prepare for the launch of 2.0.
Your capital is at risk.
When will the New LUNA be airdropped, and who can expect it?
The hottest topic in the crypto industry is the promised LUNA airdrop. Those looking forward to it are expecting it to happen around 06:00 GMT. Terra’s medium post states that the new LUNA will go to eligible investors. The following will determine who deserves the airdrop:
- How many token users held on the previous chain?
- What type of crypto did they have?
- How long did they hold the token?
Some rumours say that LUNA 2.0 will cost $50 upon launch, while others speculate that the price will be between $30 and $6. We’re yet to receive any consolidated information.
What we can say for sure, however, is that who and how many decide to mint 1 billion tokens will determine LUNA price. Should you buy LUNA and UST? We recommend keeping a sharp watch on the trends. TerraUSD, now TerraClassicUSD, currently costs $0.0356 and is down 3.82% in the last 24 hours. The trading volume of the past 24-hour is $15.1 million.
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