What is Terra Luna 2.0? Everything you need to know about Terra’s fork

What is Terra Luna 2.0? Everything you need to know about Terra’s fork

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 “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”.

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Wrapped LUNA price prediction: Can WLUNA resurface?

Wrapped LUNA price prediction: Can WLUNA resurface?

The crypto market has been battling one of its biggest selloffs, which saw the TerraUSD (UST) stablecoin and its sister cryptocurrency, LUNA, lose over 90% of value within days.

The LUNA-pegged token wrapped LUNA (WLUNA), was also affected by this blow to the cryptomarket as its value depends on the performance of LUNA. Between 5 May 2022 and 23 May 2022, the value of WLUNA fell from $86.03 to $0.000209.2.

Terra’s co-founder, Do Kwon, launched a plan to fork the Terra blockchain on 18 May 2022 in an attempt to get  the token back to its previous values. However, so far, the plan seems to have had no effect on the WLUNA token price. Will the token resurface and what’s next for the WLUNA crypto price prediction?

What is the wrapped LUNA token?

wrapped token is a cryptocurrency pegged to the value of another cryptocurrency built to represent it on a separate blockchain. Wrapped coins can be redeemed for the cryptocurrency that they represent at any given moment and their function and operation is very similar to that of stablecoins. However, instead of being pegged to fiat currency, their value mimics that of another digital asset.

Wrapped coins increase interoperability between blockchains that are usually designed in a way that makes it impossible to pass information between them.

Launched in August 2021, the wrapped LUNA (WLUNA) cryptocurrency is the compatible version of the LUNA coin built on the Ethereum (ETH) network.

The LUNA token is the native cryptocurrency of the Terra ecosystem. LUNA is a staking protocol token. TerraUSD (UST) is a stablecoin pegged to the US dollar. UST tokens are minted each time LUNA tokens are burned.

If the value of UST goes above $1, then the same amount of LUNA tokens would be burned, minting more UST and making the stablecoin less valuable. However, if the UST is valued below $1, they can be swapped for LUNA, making the tokens more valuable.

WLUNA tracks the value of the original LUNA token on ERC-20 standards, which means it can be minted on the Ethereum blockchain and has utility with other decentralised finance (DeFi) protocols built on Ethereum. One LUNA can be exchanged for one WLUNA and vice-versa.

Other uses of the WLUNA cryptocurrency include:

  • Tokenisation –  an increased speed of transactions; reduced number of intermediaries; enhanced security; greater usability; and improved transparency.
  • Liquidity on decentralised exchanges and decentralised applications (dApps).
  • Interoperability between cryptocurrencies.
  • On chain ways to enhance policies (rules on asset transfer or trade).

The circulating supply of WLUNA coins stood at over six trillion as of the time of writing (23 May), according to data provided by CoinMarketCap. The cryptocurrency had a market capitalisation surpassing $1.22bn and was ranked as the 2849th biggest token.

WLUNA was on a joyous ride

The wrapped luna coin price was on an upward trend from the early days of its launch, closely following the 2021 surge of the LUNA token.

WLUNA to USD chart, August 2021 – May 2022

As the price of WLUNA is directly correlated to LUNA, the token’s 2021 success was driven by developments in the TerraLuna ecosystem.

Although WLUNA’s value dropped in January 2022, it reversed and continued rising until the end of February 2022, when a wider crypto market sell-off wiped out nearly 50% of its value down to $52.71 on 24 February 2022.

At the start of March 2022, the WLUNA to USD price started to resurface once again and hit an all-time high of $117.98 on 5 April 2022 following a month’s pace of steady surging as the double rewards for UST launched on Polkadot (DOT) via StellaSwap (STELLA).

However, the token dipped by around 35% in the following weeks to $76.22 by 18 April 2022. Even though the token regained its value and traded at relative highs throughout the remainder of April and the start of May, more recent wrapped luna token news saw its price dip by nearly 98% from $66.19 on 8 May 2022 to $1.4318 on 11 May 2022.

The WLUNA dip

In the second week of May LUNA was still in the top 10 biggest cryptocurrencies. But, ever since UST lost its peg to the US dollar, the token – along with the wrapped LUNA coin – has been in freefall.

Many attributed LUNA’s freefall to broader negative crypto market sentiment, which saw bitcoin (BTC), the biggest cryptocurrency by market capitalisation, trading below the $27,000 value for the first time since June 2020.

However, days after the dip, reports speculated that the cryptocurrency crashed as investors decided to carry out a plan that saw them purchasing a large sum of BTC to buy UST, with the intention of profiting once the value of UST fell. This led the UST to depeg from the US dollar and lose all of its value, dragging LUNA and WLUNA down with it.

Others speculated  that the cryptocurrency lost its value due to its high dependency on the Anchor Protocol, a UST savings account that paid a 20% interest rate and made the asset a very popular investment.

In March 2022, Anchor announced that it was planning to readjust its interest rates after passing a new community vote which would see the rates drop or increase 1.5% each month. Following the news, many investors chose to empty their Anchor wallets and sell their TerraUSD, LUNA and WLUNA tokens.

In a reply to the massive LUNA and UST crash, Do Kwon said on Twitter that he was “close to announcing a recovery plan for $US”, which came days later in the form of a new Terra blockchain vote “to rename the existing network Terra Classic, LUNA Classic (LUNC), and rebirth a new Terra blockchain & LUNA (LUNA).”

Does WLUNA have a bright future?

The new community vote proposed by Kwon would see the Terra blockchain split in two. If the vote passes, the old chain will be called Terra Classic and LUNA renamed Luna Classic ( LUNC).

The plan is for the current chain and new chain to exist simultaneously, but operate separately. The new chain, on the other hand, would ditch the UST stablecoin and would instead use the LUNA cryptocurrency.

Although Kwon Do noted that his proposal had “broad support” from the community tagging a number of accounts, many users were unhappy with this announcement. Despite this fact, as of 23 May, the vote seems to be passing with over 171 million investors voting in its favour.

The Terra platform is also planning to launch Terra 2.0, an updated version of its ecosystem.

BigOne Exchange chair in Asia Anndy Lian told Capital.com that Coinbase (COIN), one of the world’s leading crypto exchanges, will be suspending WLUNA and UST trading on 27 May 2022, which could be a “sign of big volatility to come”.

“In order for a possibility for wrapped LUNA to work, LUNA got to work. Exchanges are still cautious of LUNA, UST and their ecosystem of tokens. Anchor and Mirror for example are also suspended due to the downfall of LUNA. New investors understand the volatility and always do their own research before embarking on this token again,” he added.

Since the UST and LUNA tokens collapsed, many crypto exchanges including Binance, OKX and Crypto.com have also suspended their trading.

Wrapped LUNA token price prediction 2022-2025, 2030

Despite the latest downward price action, algorithm-based forecasting service Wallet Investor gave a bullish WLUNA price prediction at the time of writing (23 May). The site noted that wrapped LUNA is “an awesome long-term investment.”

Based on its analysis of past price performance, Wallet Investor predicted that WLUNA could trade at $76.041 in 2023 and reach $369.024 by 2027.

DigitalCoinPrice supported the positive WLUNA/USD outlook yet saw a much slower pace of growth in the following years, expecting the token to grow to $0.000306 by the end of 2022 and reach $0.000480 by the end of 2025.

By the end of 2028, the site projected that the wrapped LUNA coin forecast could reach $0.000819. Its long-term forecast expected the cryptocurrency to reach $0.00100 by 2030.

Note that predictions about the future of WLUNA can be wrong. Forecasts and analyst expectations shouldn’t be used as a substitute for your own research. Always conduct your own due diligence. Keep in mind that past performance is no guarantee of future returns. And never invest or trade money you cannot afford to lose.

 

 

Original Source: https://capital.com/wrapped-luna-wluna-price-prediction

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 “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”.

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After Terra, Luna crashes, regulators count cost of crypto

After Terra, Luna crashes, regulators count cost of crypto

Spectacular collapse of stablecoin puts focus on regulatory frameworks in South Korea and Singapore.

Taipei, Taiwan – As the crypto winter deepened this month, one wealth-destroying event – the collapse of the TerraUSD (UST) and Luna coins – has brought the human cost of unstable cryptocurrency projects to the surface.

UST, a so-called “algorithmic stablecoin,” plummeted over the last week as it lost its peg against the US dollar and sent its sistercoin Luna crashing to zero, erasing about $45bn. The crash wiped out the savings of untold numbers of investors overnight.

“I felt my heart sink watching Luna go into that downward spiral,” Hank Kennedy, a factory worker in Chicago, told Al Jazeera. “It (the crash) has had a huge impact on my life.

“Now I’m behind on all my bills, and I’ve lost $40,000, which was everything I had in my savings,” Kennedy added. “I was actually thinking that I would be able to make enough money to pay my home off, but instead, I’ve lost everything.”

The incident epitomises regulators’ nightmare scenario of crypto projects going wrong and prompted US Treasury Secretary Janet Yellen to call for regulation of stablecoins – whose selling point is their supposed stability due to being pegged to another currency or commodity – by year’s end. Former lawyers at the Securities and Exchange Commission (SEC) say the agency is probably already investigating the case.

In Asia, regulators may also have impetus to act.

Do Kwon, the creator of the cryptos, is a South Korean national, while Terraform Labs and the Luna Foundation Guard, the organisations that support the digital coins, are both registered in Singapore.

South Korean authorities launched an “emergency investigation” into the case this week. Investors in Singapore have filed police reports, although authorities have yet to make any move.

Kwon wrote on Twitter last week that he was “heartbroken” about the pain his invention had brought investors and that neither he nor the companies associated with the project had sold UST or Luna to profit from the crash. The statements came after the founder earlier that day proposed a “revival plan” to restart the network and distribute ownership of the project via one billion new tokens issued to holders of the collapsed currency. Kwon and the Luna Foundation Guard did not respond to requests for comment before publication.

The crash comes amid a rethink of the city state’s regulatory approach to digital assets as it tries to position itself as a responsible crypto hub. Singapore’s response could set a precedent as the social and economic costs of poorly managed projects come into sharper focus.

Singapore
Singapore is trying to position itself as a responsible crypto hub [File: Ore Huiying/Bloomberg]

“The government of Singapore is not going to be impressed that a firm registered in its country, with no real material ties to the city-state, has caused such damage to investors around the world,” Sam Reynolds, a Taipei-based crypto analyst at CoinDesk, told Al Jazeera.

“This is likely to lead to a further tightening of rules surrounding crypto firms registered in Singapore for jurisdictional preference yet conducting business primarily abroad,” he added.

Singapore’s parliament had already passed a law last month to increase oversight of firms like Luna that are domestically registered crypto companies but mainly operate abroad.

Under its Payments Services Act 2019, entities that offer payment instruments, such as algorithmic stablecoins, require a Digital Payment Token Services (DPTS) licence. Though Singapore has only issued a DPTS licence to a handful of firms, it has granted many more companies temporary exemptions from the law.

Yet when billions went up in smoke up this month, Kwon’s organizations had neither a DPTS licence nor an official exemption, according to Singapore’s Financial Institutions Directory.

Its failure to register is the first of three interrelated factors that lay compelling grounds for legal intervention by the city-state, according to Anndy Lian, a Singaporean crypto thought leader and author of Blockchain Revolution 2030.

“The second (factor) is this was a stablecoin,” Lian said, noting that since it was advertised as having parity with the US dollar and boasted 20 percent yields, it appealed to investors looking to stake their savings over time. This differentiates it from other cryptocurrencies whose price floats freely and are conducive to speculative trading.

“That means many retail investors got hurt on the pretext they had bought into the project because it is a stablecoin,” said Lian.

“From a Singaporean perspective, if you are a retail investor and you feel that you have been a victim of fraud, and have lost a certain amount of dollars on paper even though you held your investment and did not sell … that is a possible lawsuit Singaporeans can pursue or the government can pursue,” he said.

Cooperation with foreign regulators

The third reason is Kwon’s planned “fork” – the closing of the original network and launching a substitute – which has been put forth to revive the currency. Lian said such a move would  “dilute all the shareholders” and redistribute the tokens in a way that is likely to be highly inequitable.

“I think the Singaporean government will surely take some action after the fork is attempted,” he said.

South Korea’s Financial Supervisory Service (FSS) said this week that increased cooperation with foreign authorities is needed to regulate crypto after the Luna crash.

Lian believes Singapore may coordinate with foreign regulators on the case, too.

“Because this is a global event, there might be a common interest for the US and Singapore to work together on this case,” he said.

Lian said any action should not set the wrong precedent by insulating crypto investors from all losses.

“It would be misleading if investors believed they can claim losses from all altcoins. This was different since this was a stablecoin. We need to make that demarcation very clear,” he said.

“I think more regulatory clarity would need to be established before crypto-specific cooperation with countries could happen,” Reynolds said, referring to the continuing lawsuit between Terraform Labs and the SEC that seeks to establish if the financial watchdog has jurisdiction over the project.

Even if the company were found liable, it is unclear whether it has the assets to repay investors.

“The question would be, what assets would Terraform Labs and the Luna Foundation Guard have to repay investors?” Reynolds said.

“The Luna Foundation Guard, with its current balance sheet, could only pay out pennies on the dollar. And aside from those balances, it is unlikely that Terraform Labs has material assets sufficient to pay out any claims against it in a meaningful way,” he added.

“Before this happens, we would also need a determination if the collapse happened because of fraud, negligence, a coordinated attack, or market rejection of the platform. Right now, that’s not clear.”

Do Kwon
Terraform Labs founder Do Kwon is a South Korean national who registered his company in Singapore [File: Woohae Cho/Bloomberg]

Lian said regulators will look for a strong expression of shared grievances to justify moving forward with a case in Singapore.

In recent days, an online community in South Korea named “Victims of Terra-Luna coin” has been formed for this purpose.

Kennedy, the US worker who lost his funds, said he would readily join a class action lawsuit against Kwon.

“(This is) the reason why people like me try to talk with him on Twitter every day … to get some type of answers,” he said.

As regulators mull over their next move, the saga has offered industry players a moment of pause to reflect on what constitutes good governance and sound investing.

“It will take time to get the trust back,” Lian said, adding the case has spooked institutional investors in Singapore.

“I think we need to rethink what decentralisation means. What will happen next with Luna will not be based on any consensus formed among its community.”

Reynolds said investors should do their research and ensure they have diversified their assets.

“On paper, algorithmic stablecoins were a good idea but the industry is coming dangerously close to a ‘2008 moment’ as a result of one project’s outsized ambition,” he said. “The VCs that backed Terra need to have a serious think about how we got to this moment.”

SOURCE: AL JAZEERA

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 “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”.

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