The Terra Luna community has approved of the revival plan that would see a hard fork from the failed token and the creation of a new blockchain Terra 2.0.
Earlier this month, LUNA crash made headlines, sending shockwaves through the wider cryptocurrency space, with bitcoin (BTC) and ethereum (ETH) crumbling and cryptocurrency trading platform Binance (BNB) forced to suspend trading.
The luna coin is part of a dual-token system along with Terra’s US dollar-pegged stablecoin Terra USD (UST).
Terra USD is an algorithmic stablecoin, which means that its peg to the US dollar is ensured by algorithms and game theory, using a series of smart contracts to keep the price at $1.
When UST unpegged from the USD on 9 May, UST redemptions massively inflated LUNA supply, driving the price down by 99%. The UST crash happened as the algorithms could not keep up, forcing the Luna Foundation Guard and its governance team to sell their bitcoin reserves to save the stablecoin.
This caused BTC to drop to $27,000 and wiped out nearly $400bn of the total cryptocurrency market value.
What is LUNA 2.0?
In a new plan proposed by Kwon, the Terra blockchain would undergo a hard fork, with the launch of Terra 2.0 and the old luna tokens being renamed into luna classic (LUNC). Kwon’s revival plan has passed with 65.5% majority approval.
The snapshot for Terra 2.0 given by Kwon gives an idea of how the blockchain would work and states that the new Terra will be created without the algorithmic stablecoin.
The Terra Builders Alliance have provided technical details on integration, decentralised applications (dApps) migration, and a guide to rebranding the original Terra chain as ‘Terra Classic’.
The tokens will be renamed as Luna Classic (LUNC), and while the original Cosmos chain will continue to operate, the option to mint or burn coins will be disabled.
The new blockchain is due to arrive on 28 May, according to Terra’s twitter. “The community has been working around the clock to coordinate the new chain’s launch,” the project said.
Terra Station, Terra Finder, the project’s block explorer, and Terra Observer, the project’s feeder for dApps, will all have full functionality when the network goes live, according to Terra’s team.
How will LUNA Classic work?
What is Terra Luna Classic (LUNC)? It’s simply a new token that will replace failed LUNA coins. In the latest LUNA 2.0 news, the new tokens are being airdropped to LUNA and UST holders on 28 May, according to Terra’s Twitter.
There are predetermined groups that are receiving airdrops of the new LUNA coins:
- Community pool will receive 30% of the token distribution, with 10% earmarked for developers.
- Pre-crash LUNA holders will receive 35% of the new tokens.
- Pre-crash UST holders will receive 10% of the new tokens.
- Post-crash LUNA holders will receive 10% of the new tokens, including staking derivatives – 30% of the tokens will be unlocked at genesis, with the remaining 70% vested over two years, with a six-month cliff.
- Post-crash UST holders will receive 15% of the tokens – 30% of those are unlocked at genesis, and 70% will be vested over two years, with a six-month cliff.
Terra will airdrop the new LUNC tokens to all LUNA holders with at least 10,000 of luna tokens or less “to ensure that small luna holders have similar initial liquidity profiles”.
The governance will also remove Terraform Labs’ (TFL) wallet from the whitelist for the airdrop, to make Terra a fully community-owned chain. Additionally, a large portion of the token will be allocated to Terra dApp developers to make the ecosystem successful in the long run and provide network security.
Terra LUNA recovery will depend on how its developers and governance team manage to prepare core public infrastructure, wallets, GEN file, execute the launch, provide oversight on essential development programs and act as a steering committee for the new chain.
Meanwhile, Terra ecosystem has millions of users globally, and the Terra Station allows developers from across the world to work together on multiple projects from decentralised finance (DeFi) to fungible labour markets, enabling them to use state-of-the-art infrastructure and gain community experience.
LUNA Classic forecast
“No matter what the price is and how the fork is going to turn out, the more immediate thing to do is to stabilise the projects in their current ecosystem.”
by Anndy Lian, chairman at BigONE Exchange
The future of Terra (LUNA) depends on its successful rebrand and launch. With the Terra community’s strong support to give LUNA a rebirth, the team is on the recovery plan. Popular Terra Classic projects, Astroport, Nebula, Prism, RandomEarth along with several others, will be migrating to the new Terra.
As of 27 May, the LUNA classic price stands at $0.0001313, according to CoinMarketCap’s Terra Classic market page. However, as Terra Chain will be rebranded as Terra Classic the price data would migrate to Terra V2 CMC page.
As the new LUNC coin is at the very early stage, it is extremely difficult to forecast its further direction. As of 27 May, an algorithm-based forecasting service Price Prediction suggested that the new coin to average at $0.00017152 in 2022, rising to an average of $0.00052103 in 2025, and averaging at $0.003 by 2030.
However, these predictions are based on algorithms and do not consider the current scenario. A rebranding attempt to save the crypto and regain the community’s trust will depend on how the launch plays out and if the Terra team can succeed in the airdrop mission as promised.
Anndy Lian, chairman of the Netherlands-registered crypto trading platform BigONE Exchange said that Terra community is remaining strong, yet he’s uncertain for how long.
“They are willing to make changes on their own. Some of them even go to the extent of sending their own wallet to the burn address to help reduce the supply. This is the kind of commitment you see on the ground,” he told Capital.com in a note.
“But such moves by the community are temporary and will not last long given that the core issues are not resolved. They have to clearly state how the funds were being managed, who was and is involved in the whole process.”
Lian believes that in order for Terra 2.0 forking to succeed, the project needs trust and transparency, which would ensure an upbeat outlook and speedy growth.
“Many people out in the market are just concerned about the price. The truth is no matter what the price is and how the fork is going to turn out, the more immediate thing to do is to stabilise the projects in their current ecosystem, let them migrate their dApps and apps to the new blockchain so that they do not have any downtime,” Lian added.
Note that price predictions can be wrong and shouldn’t be used as a substitute to your own research. You should always conduct your own due diligence. Keep in mind that cryptocurrencies are extremely volatile, and never invest or trade money you cannot afford to lose.
Original Source: https://capital.com/terra-luna-2-0
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
