The revival plan after the meltdown of Terraform Labs’ stablecoin TerraUSD (UST) and its native token Terra (LUNA) had a bumpy start as the LUNA 2.0 saw a significant market fall hours after its launch.
According to statistics from CoinMarketCap, the token’s value plummeted by more than 67%, trading at $5.78 from its launch price of $17.8.
The decline follows the successful distribution of LUNA 2.0 tokens to LUNA Classic (LUNC) and TerraUSD holders by Terraform Labs (UST). The maximum supply of the token in circulation was limited to 1 billion on May 28.
LUNA 2.0 Features
Terraform Labs claims that LUNA 2.0 was deployed on Phoenix-1, the Terra 2.0 mainnet. The team said in a release that node services, wallets, and explorers would follow the mainnet’s launch.
In addition, the LUNA 2.0 token has no shared history with the earlier version of the asset, and it will be built on a genesis blockchain beginning at block 0 with no dApps at launch.
Several prominent cryptocurrency exchanges, including Aucoin, Kraken, Bitrue, Lbank, Bitfinex, By bit, Nexo and Bitget, have listed the token, enabling investors to trade it.
Trading for the new version of $LUNA is now online! @terra_money
Try now with $USDT & $USDC pairs:https://t.co/p5ShyohEmZhttps://t.co/TBp90gD7Yr pic.twitter.com/8tKSAFKN5F
— Bitrue (@BitrueOfficial) May 28, 2022
Also, several crypto ecosystems have pledged to aid Terra projects in reviving. For instance, Binance announced through the BNB Chain that it would give funding and assistance to companies contemplating migration from the Terra ecosystem.
However, the price adjustment of LUNA 2.0 does not correlate with the token’s pre-launch interest. According to Finbold’s research, the popularity score for the term ‘LUNA 2.0’ on Google Search increased from 8 to 100 within just two weeks from May 1.
After completing a community-wide vote, the decision to launch LUNA 2.0 was made official on May 25. The new token was introduced as part of Do Kwon’s effort to revive Terra after investors lost a considerable amount of money in the coins.
Kwon Accused of Fraud
Kwon has been the primary focus of the crash and was blamed by a portion of the crypto community. In addition to the Terra dispute, Kwon is accused of fraud over the Mirror Protocol.
LUNA continued to incur losses, and its market value fell below $1 billion. The accident had created a buzz about LUNA, as Google search popularity ratings increased.
Optimistic investors poured more funds, resulting in a short-term rise in interest in the devalued coin. According to market observers, the token’s popularity stemmed from the expectation that it would resemble meme currencies like Dogecoin.
Notably, several crypto analytics firms have sought to identify what went wrong following the network’s fall. For instance, Nansen’s research team attributed the network’s failure to an attack from a single individual.