Is the moon coin set to make a comeback?
After the crash of the stablecoin, Terra (UST), the company is trying to revive its other coin, Luna. Just like Terra, Luna also suffered a terrible fate in May 2022. Millions of investors saw their money dissipate into thin air.
TerraUSD (UST) and Luna are the two native tokens of the Terra network, a blockchain-based project developed and run by Do Kwon, the CEO of Terra Labs in South Korea. Terra aims to become a peer-to-peer electronic cash system.
Terra is a stablecoin that was pegged to the dollar via an algorithm. That means, its value was supposed to be derived from the US Dollars always, giving it a constant price of $1.
The cryptocurrency was widely received because of its investing via staking strategy that saw a lot of investors locking their money up for months with hopes of double digits return on investments. Before the crash, it was the second largest smart contract blockchain, only behind Ethereum.
In the first week of May 2022, the crypto world suffered a huge shock when the algorithmic stablecoin, Terra (UST), lost its $1 peg and fell to $0.97. The coin went on a continuous free fall to $0.0018 and hasn’t been able to rise ever since.
According to crypto news publication, CoinDesk, “The total supply of Luna went from about 725 million tokens on 5 May to about 7 trillion on 13 May. Meanwhile, Luna lost 99.9% of its value. This is what hyperinflation looks like.”
Supporters of Terra had a consensus to bring Luna back. The company announced plans to split the Terra Blockchain and create a new fork which will be named Luna Classic or Luna 2.0.
The company made a tweet about the new fork on Wednesday, May 27, 2022.
“With overwhelming support, the Terra ecosystem has voted to pass Proposal 1623, calling for the genesis of a new blockchain and the preservation of our community.”
The new Luna coins were airdropped to all investors who once held the previous Luna coins. The company plans to mint 1 billion new tokens that will be distributed across board to all investors.
Investors who had more than 10,000 Luna tokens are slated to receive about 30% of their coins, with the remaining 70% to be paid over a two years period. This is to prevent them from immediately selling it off and causing another massive dip.
While investors with over a million Luna coins will wait a year for their tokens, and will be limited to a four-year vesting period before they can access all their Luna..
This new policy was encouraged by a lot of crypto heavyweights, including exchanges like Huobi which promised to list the new Luna token on its platform once it was released.
According to its medium post, the company is first doing away with the algorithmic stablecoin in order to reduce the amount of technicalities that the new blockchain would have.
“The old chain will be called Terra Classic (token: $LUNC), and the new chain will be called Terra (token: $LUNA). The chain upgrade will commence a few hours after the Launch snapshot.”
New Luna holders will receive 35% of the newly minted tokens, while 10% will go to those who held Terra (UST) before the crash of the cryptocurrency, 25% will go to traders who still own Luna and Terra and the final 30% will go to a pool of Luna investors who are making the comeback possible.
Some of the exchanges that agreed to list the new coin include:
Luna 2.0 Current Performance
After the airdrop, Luna 2.0 got listed on exchanges at a price of $19.53. The coin quickly crashed to a low of $3.93 and was trading between $4 and $7. Binance announced a release which pushed it up to $11.97. As at the time of this publication, the token is now trading at an all time low of $2.57 according to CoinMarketCap.
Possibilities and Forecast for Luna 2.0
The new Luna has a slight chance of recovery because investors have lost their trust in the company, a requirement for the success of any crypto and blockchain project.
Losses like these cannot be easily swept under the rug and Terra cannot just press a restart button and move on. Human lives have been affected and we believe this will reflect in the acceptance of the new Luna token.
The immediate dip in price after its release already tells us all we need to know.