Terra 2.0 Launches as Planned by Do Kwon but Its Value Has Already Begun Tanking Heavily

The recovery plan after the collapse of the Terraform Labs stablecoin TerraUSD (UST) and its native token Terra (LUNA) has begun a rocky path after the LUNA 2.0 cryptocurrency suffered a major price correction hours after its May 28 launch. Around $30-50 (~Rs 2,325-3875) by members of the Terra community prior to launch, the new governance token quickly rose to an all-time high of $18.87 (~Rs 1,462) shortly after launch, only to plummet. to $4.08 (about 316 rupees) early Sunday.

The drop came shortly after Terraform Labs distributed LUNA 2.0 tokens to investors who own LUNA Classic (LUNC) and TerraUSD (UST).

What is Terra 2.0?

Terraform Labs, the core development company behind Terra, has proposed a new blockchain. It only took a few days after this proposal was approved for Kwon to publish another series, the series open for use today. Several apps have now been ported to the new series, including Astroport, Prism, RandomEarth, Spectrum, Nebula, Terraswap, Edge Protocol, and others.

Prior to today’s launch, governance voted to change the name of the original network to “Terra Classic,” whose tokens are now called LUNA Classic (LUNC), in order to position the newly launched Terra 2.0 as the main network. Unlike its predecessor, the new Terra chain exists without an algorithmic stablecoin and only comes with LUNA which has a total fixed supply of 1 billion tokens.

These LUNA 2.0 tokens will be traded separately from the original LUNA Classic tokens, which are over 6.5 trillion in width.

The main reason behind the airdrop of the new LUNA coins on May 28, was to compensate Terra stakeholders in the Classic Series. It has been designated to receive 70 percent (or 700 million) of the total LUNA 2.0 token supply. The amount of LUNA 2.0 airdrops that each person gets varies depending on whether those tokens were held before or after ground tanks were loosened, according to an official announcement.

The airdrop is expected to be claimed shortly after launch, either through central exchanges or Terra’s own site. Several centralized cryptocurrency exchanges including Binance, Huobi, Kraken, Bitfinex, Bitrue, Kucoin and Bybit have said that they are allowing Terra supporters to receive their tokens from within their platforms.

However, not all airdropped tokens can be claimed upon launch; Only 30 percent of the initial supply can be claimed immediately. The remaining 70 percent of the amount of airdrops is directly stacked with auditors to ensure network security and will be due for up to two years.

Along with 700 million LUNA tokens split between the two investor classes mentioned above, Terra’s community pool, an on-chain treasury fund, is set to acquire 30 percent (300 million) of LUNA on the Terra 2.0 Series. The community pool is controlled by Terra Governance to fund development activities. Of the total sum of the pool, 30 million was allocated to developers who decided to stay and rebuild in the new Terra series, according to previous ad.

Cryptocurrency is an unregulated digital currency that is not legal tender and is subject to market risk. The information in the article is not intended to be and does not constitute financial advice, business advice or any other advice or recommendation of any kind provided or approved by NDTV. NDTV will not be liable for any loss arising from any investment based on any recommendation, forecast or any other information contained in the article.

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