The Terra blockchain, including TerraUSD and TerraLUNA, has plummeted in the past few weeks, its value falling to $0.
Last Saturday, May 28, the Terra blockchain launched an attempt to regain its market value. However, it looks like it has dropped from its original price drastically.
A new version of the formerly LUNA cryptocurrency on major cryptocurrency exchanges is already live, and it has gotten off to a poor start so far.
The new Terra token experienced a price decrease of more than 70% within hours of reaching $30, prompting yet another round of criticism from the cryptocurrency community.
TerraLUNA 2.0
Terra blockchain supporters voted to revive the token LUNA once more. However, this time, the system's stablecoin TerraUSD (UST) will not be relaunched anymore. The Terra system has two coins in its system: the token TerraLUNA and the stablecoin TerraUSD.
TerraUSD is an algorithmic stablecoin backed by a Bitcoin reserve. It also relies on a digital code to maintain its supposed value of $1 and is also dependent on its sister token, LUNA.
Unfortunately, the stablecoin price crashed, causing the company to lose billions of value. As the price of digital currencies dropped, investors ran away from the stablecoin, which caused UST to plummet, taking LUNA down with it.
According to CNBC, "as part of Terraform Labs founder Do Kwon's revival plan, new LUNA tokens, also known as LUNA 2, are being airdropped to investors who previously held Luna Classic (LUNC), TerraUSD Classic (USTC), and Anchor Protocol UST."
When it was at the height of its power, the old luna, now referred to as the "luna classic," had a supply in circulation that exceeded $40 billion.
Terra 2.0 is the name investors have given to the latest iteration of the LUNA platform. It is currently traded on exchanges such as Bybit, Kucoin, and Huobi, among others. The largest cryptocurrency exchange in the world, Binance, has announced that it will list LUNA on Tuesday, May 31.
Its launch has not been successful. According to data provided by CoinMarketCap, LUNA dropped all the way down to a price of $3.913 just a few hours after reaching its all-time high of $19.53 on Saturday. It has since stabilized at a price of approximately $8.8 at this point.
The Revival and Challenges of Terra 2.0
Terra's immediate revival after it lost billions in market value and plunging prices had numerous traders and investors skeptical about the system. The launch of Terra 2.0 will become the new chain that will work toward reviving the LUNA and TerraUSD ecosystems.
According to Bitcoinist, "Kwon's Terra resurrection plan includes hard forking the existing blockchain and reissuing LUNA tokens to existing investors based on a snapshot taken before the death spiral bled the LUNA and UST markets, effectively causing in unrecoverable losses for investors."
However, some cryptocurrency enthusiasts had doubts about the viability of LUNA 2.0. Due to the lightning-fast pace at which the Terra team established the new network, some people believe that they are up to no good and are only interested in making quick money.
Cryptocurrency exchanges such as Kraken, Bittrue, Kucoin, Bybit, Nexo, Lbank, Bitfinex, and Bitget are some of the ones that have added support for the new LUNA cryptocurrency.
The price has been fluctuating between and in the red for the past few days, and it is still currently valued in the red as of writing this. Numerous investors have lost faith in the Terra ecosystem due to the unfortunate events that have transpired over the past few weeks. As a direct consequence, it is not surprising to find that there is competitive selling pressure on the new chain. In addition, since the UST stablecoin will not be present on the new chain, the primary function of the LUNA token will be to exercise control over the ecosystem.
The Luna 2.0 update is now for sale and costs approximately $8. According to statements made by some genuine Terra and LUNA owners, the airdrop made it possible for some owners to recoup a decimal-place percentage of the initial investment they had made in the respective cryptocurrencies.
