Terra’s LUNA Classic (LUNC) and TerraUSD (UST) algorithmic stablecoin projects, which crashed earlier this month and led to the overall collapse of the crypto ecosystem, have revived as “Terra 2.0” in its final attempt to recover the losses of investors.
It’s been only two days since the re-launch of the Terra ecosystem, and the price of Terra LUNA 2.0 has already plummeted by around 70%. Under the recovery plan of Terraform Labs founder and CEO Do Kwon, the new LUNA 2.0 tokens are being airdropped to small and big investors that previously invested in Luna Classic, Anchor Protocol UST (aUST), and TerraUSD Classic (USTC). Since its relaunch on Saturday (May 28), the price of LUNA 2.0 has tanked to nearly $5.71, up from $18.87, according to reports from CoinGecko.
Before the launch, Do Kwon said that the motivation for recovering the token was to support the broader ecosystem that had developed around Terra. He added,
“While TerraUSD (UST) has been the main contributor to Terra’s success over the last year, the circulation of the UST has resulted in the development of one of the robust developer ecosystems in cryptocurrency.”
“The Terra ecosystem and its small community of investors are worth preserving. The community consists of hundreds of developers working actively on everything from decentralized finance (DeFi) to NFTs and state-of-the-art foundations to the community experience. Even though the market is witnessing volatility, Terra has huge popularity and a robust brand name that almost everyone globally is aware of,”
Do Kwon said?
However, at this point, the severe plunge seems to indicate a considerable lack of faith in Do Kwon’s revival moving forward. Additionally, several holders took to Twitter to indicate that they are not looking to recover the overall capital they lost in Terra’s crash. Instead, they’re looking to recover a small portion of the capital they lost in the crash, aiming to wipe their hands completely off the project.
Investors Stuck Between “Purchasing” and “Ditching” LUNA 2.0
Binance — one of the world’s largest and most popular cryptocurrency exchanges — plans to begin a multi-year distribution of Terra (LUNA) 2.0 to select users starting tomorrow (May 31). The exchange plans to list the token for trading through its Innovation Zone — the trading platform for highly volatile and risky crypto assets.
A few investors in the community who have announced plans to ultimately buy LUNA 2.0 once the market has stabilized, such as “lurkaroundfind” have now anticipated further collapse once the Binance drop goes live. They highlighted that the crypto exchange has 15.7MM liquid LUNA 2.0, which will be live tomorrow. They indicated that investors who used the Anchor Protocol would rather cash out as they have lost hope in the Terra ecosystem. Support these statements, even popular investors from the crypto space such as Lark Davis took to Twitter yesterday, announcing to his 988,000 followers,
“I don’t have any plans to buy LUNA 2.0 tokens, but I will dump any airdrop if I get something more profitable on the platform.”
Referred to as Phoenix-1, the Terra 2.0 mainnet launched Saturday (May 28), according to the original timeline set by Terra developers, and started developing blocks. The public node services, explorers, and wallets to follow the mainnet are now live. Do Kwon said that existing Terra stablecoin users should now be able to see the token only by logging into the station and refreshing the platform?