Last week, the Terra (LUNA) cryptocurrency experienced an unprecedented fall in value, sending shockwaves through the market. This crash was caused mainly by the de-pegging of TerraUSD (UST) stablecoin. UST’s price plummeted when it lost its dollar value. You’ll get the information about Luna 2.0 in today’s article.
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About Luna 2.0
A blog post by Do Kwon earlier this week revealed the LUNA Revival Plan 2. A new blockchain and a token reset are all part of the plan. To help stabilize the price of the LUNA token, Terra’s Life Foundation Guard (LFG) deployed aid of around $1.5 billion earlier this week. LUNA’s latest figures, however, show how that didn’t work out. Thus, Revival Plan 2 was introduced. The Terra Blockchain has been up for grabs since the demise of UST and LUNA.
According to CMC, the price of Terra UST has dropped to $0.062873, while the price of LUNA is $0.00013 and has fallen steadily for the past week. LUNC will be the current token for the old Terra classic chain, and LUNA will be the token for the new Terra chain without the algorithmic stable coin UST.
What Will be Its New Name?
A new Terra blockchain will be created based on the current Terra blockchain, according to Do Kwon. But it will not contain the UST stable coin mechanisms. Terra Classic (LUNC) is the new name for the older network. So as not to confuse future investors, Terra (LUNA) is the name of the new blockchain. A massive airdrop is being planned across platforms. Including stakeholder groups of Luna Classic, residual holders of the UST, as well as prominent app developers of the previous chain.
Due to the removal of the TFL wallet, the new Terra chain is a community-owned chain.
Are Tokens Going to be Reset?
New Luna would be distributed with a supply of 1 billion. Luna holders would receive 35% of this Luna, and current Luna holders would receive 10%. Additionally, 10% would go to holders of USTs before the attack, and 20% to holders of USTs currently. A community pool would receive 25% of the remaining funds, with 10% designated for development.
What About the New Inflation Rate?
According to Do Kwon, the existing revenue stream will not protect the security expenses without raising swap fees. In line with Terra’s native token’s inflation rate, Kwon asked community members to incentivize Terra’s network security.
Will Luna Recover?
LUNA’s revival plan, according to Edul Patel, CEO, and Co-Founder of the international crypto-exchange Mudrex will cause “Terra more like a DAO.” For those clueless, a DAO is a community-driven and controlled association that is not controlled by a major authority. From a price standpoint, Luna has not recovered to its previous level but has risen from its all-time low. Luna’s price is $0.00013 at the time of publication, a decrease of 99.9% in the last seven days, but still over 12,000% higher than its low. At the beginning of May, Luna’s price was around $80.
Luna’s price has dropped 26% in the last 24 hours after stabilizing over the weekend. On May 9, Luna’s market cap was $20 billion, but it has rebounded to over 800 million now. Despite a decline of over 90%, the market cap is still nicely above the $58 million it reached on the 13th of May. The sharp drop in Luna’s price can be explained by the circulating supply of Luna. Before the crash, there were 343 million Luna in circulation, but on May 12, there were over 13 billion Luna in circulation. The Luna value has jumped to 6.5 trillion as of May 19.
In other words, even though Kwon said the “UST peg failure is Terra’s DAO hack moment – a chance to rise up anew from the ashes,” this newfound revival hasn’t yet appeared.