Terra (LUNA) Tanks 70% Just Hours After the Terra 2.0 Mainnet Goes Live

Terra has been reborn as Terra 2.0 after the successful approval of Terra’s recovery plan, put forward by Do Kwon, the founder of Terraform Labs. However, its new token is down more than 70% after a promising start.

An airplane with the Terra logos crashes into a dull landscape

Terra has been reborn as Terra 2.0 following the approval of Terra’s recovery plan, put forward by Do Kwon, the founder of Terraform Labs. However, its new token is already down by more than 70% despite a promising start.

Terra 2.0 Launch and Airdrop

On May 28th, 2022, at around 06:00 (UTC), Do Kwon announced the launch of Terra 2.0. With Terra 2.0 now active, the original Terra (LUNA) has been renamed LUNA Classic (LUNC), while TerraUSD (UST) is now TerraClassicUSD (USTC).

Sponsored

With the launch, 70% of the supply of LUNA 2.0 tokens were airdropped to users. The quantity of tokens received by each user was determined by the type and number of tokens they had held on the Terra Classic chain.

Terra 2.0 Plunges 70%

Terra 2.0 launched with an initial listing price of $0.5, but quickly rocketed to achieve a high of $19.54, according to CoinMarketCap.

The positive news was short lived though, as investors began to dump the coin in the hours that followed, causing LUNA to tank. The sell-off resulted in LUNA losing more than 70% of its all-time high value.

The 72 hour price chart for Terra 2.0 (LUNA). Source: CoinMarketCap

The price of LUNA fell from as high as $19.54 to as low as $3.63 on May 28th. However, in the wake of the intense sell-off, Terra has begun to show signs of recovery, and the Altcoin is trading at $6.01 at the time of writing⁠—75% higher than its launch date low.

The 24 hour price chart for Terra 2.0 (LUNA). Source: CoinMarketCap

On the Flipside

  • Experts have expressed concern about the sustainability of Terra 2.0 with the absence of USTC, since the original Terra ecosystem functioned around the algorithmic stablecoin.

Why You Should Care

The initial offloading that sent LUNA’s price spiralling is believed to have been caused by investors of the original Terra, who were looking to recoup part of their losses via the new airdropped token.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia