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.
Terra 2.0 Launch and Airdrop
On May 28 2022, at around 06:00 AM 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), and TerraUSD (UST) is now TerraClassic USD (USTC).
After the launch, users were airdropped 70% of the LUNA 2.0 token. The amount of tokens received by users was determined by the type and quantity of tokens they held on the Terra Classic chain.
Terra 2.0 Plunges By 70%
Terra 2.0 launched with an initial listing price of $0.5. However, within minutes of the airdrop, the price of Terra skyrocketed to as high as $19.54, according to CoinMarketCap.
LUNA began to tank in the hours that followed as investors dumped the coin. The result of the sell-off saw LUNA lose more than 70% of its all-time high value.
The 72 hours price chart of 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 28. However, after the intense Sell-Off, Terra is beginning to show signs of recovery, with the altcoin now trading at $6.01, 75% higher than its launch date low.
The 24 hours price chart of Terra 2.0 (LUNA). Source: CoinMarketCap
On The Flipside
Experts have shared concerns about the sustainability of Terra 2.0 with the absence of USTC since the original Terra ecosystem functioned based on the algorithmic stablecoin.
Why You Should Care
The dump that sent the LUNA plunging price is believed to be from investors in the original Terra who looked to recover part of their losses via the new airdropped token.
To learn about the launch of Terra 2.0, read:
Terra Announces Rebirth Date, Gets Support from Major Exchange
For more information about the challenges faced by Terra, read the following:
Binance CEO Calls Terra Luna & UST Mechanism “Stupid”
Wall Street Investor Compares the Terra Case to a “Pyramid Scam”