Countless investors shared stories about how they lost their life savings in Terra and Luna. Terra, which again is supposed to consistently be valued at $1, is now worth pennies. Luna, which hit an all-time high value of $104 just this past March, is now worth fractions of a penny.
TerraForm Labs founder Do Kwon's proposal plan to save the UST and Luna by replacing the existing version of Luna. It has severed ties to the UST stable coin that saw the crash happen in the first place with the new Luna 2.0. However, the old chain and old Luna won't just disappear, they will co-exist. The old chain will be known as Terra Classic, while Luna Classic will also see the existing Luna continue.
The developer community overwhelmingly approved the new currency proposal by about 1,623 votes, a revised version of the founder's initial plan to relaunch the network, with the new Terra network to be launched on Friday with one notable difference of no mathematically stable currency. Speaking after the launch of the Terra 2.0 main net, Terra said: "Today marks the beginning of the next chapter for the Terra community. One in which our potential knows no bounds and our collective creativity can flourish." Following the Terra Luna vote result that saw 65% vote in favor of a new chain, Binance first announced it would support the new chain. Now that Luna 2.0 has launched, it has confirmed the timings of this listing.
Existing Luna holders were allocated Luna 2.0 via an airdrop at the new Terra chain's launch with a supply of 1 billion, the airdrop allocations are as follows:
Pre-attack Luna holders: 35%, Post-attack Luna holders: 10%, Pre-attack UST holders: 10%, Post-attack UST holders: 15% and Community Pool: 30% (with 10% for developers) controlled by Luna stakes. Not all the 1 billion Luna will be available at launch. A large majority of this will be vested until at least six months after the new chain releases. A reported 210 million coins are currently in circulation.
Luna 2.0 was indeed launched, hitting a high of nearly $20. However, widespread sell-offs of those ‘airdropped’ tokens on Friday saw the asset drop from around $19.50 to around $6 this morning, representing a drop of almost 70%.
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The primary challenge for all new cryptocurrencies is to create reasons for people to buy them. Demand can be driven by the prospect of huge gains if the token catches on or can be primed by providing a reward to currency holders. In the case of TerraUSD, the main attraction involved Anchor, a lending project based on the Terra blockchain that promised interest rates as high as 20% for UST deposits, an offer that led to UST’s explosive growth.
Some called UST a new form of Ponzi scheme. Others more politely said that Terra’s business model had a vulnerability at its heart: that UST’s peg to Luna without a peg to anything else would only work if people believed that they would keep their value, and they would only keep their value if more and more people were to buy them.
Terra’s effort to revive LUNA was criticized by Dogecoin co-founder Billy Markus, who called individuals who bought into it “really foolish.”
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