Terra Resurrects Failed Luna Cryptocurrency
Published: June 1, 2022
The collapsed Luna cryptocurrency launched a new version. However, the new version is off to a rocky start.
Supporters of the Terra blockchain project voted to revive Luna just last week. The other option was to revive terraUSD, a so-called “stablecoin,” but it caused chaos in the crypto market and thus was not voted for revival.
TerraUSD relies on code and a sister token, Luna, to maintain a $1 value. Digital currency prices fell, so investors fled the stablecoin and took Luna down with it.
Luna classic, as the old luna was known, had a circulating supply of more than $40 billion. The new iteration, Terra 2.0, is already trading on some exchanges like Huobi, Kucoin, and Bybit. The world’s largest crypto exchange, Binance, said it would list Terra 2.0 on Tuesday.
On Saturday, the new luna peaked at $19.53 before dropping to $4.39 just a few hours later. Since then, the price has stopped at around $5.90.
Cryptocurrencies are taking over the world, but analysts are not very enthusiastic about the chances of Terra 2.0 being a success story, considering that it will have to compete with “Layer 1” networks. It is the infrastructure behind cryptocurrencies like Ethereum, Solana, and Cardano.
Those who will get Luna are, for the most part, people who held Luna classic and UST before they collapsed. So, this is Terra’s effort to compensate those investors who lost money. Even though experts say that many people are unlikely to trust Terra again.
Vijay Ayyar, the head of international at crypto exchange Luno says that the project has faced a “massive loss of confidence.”