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In recent weeks, the breakdown of the Terra ecosystem has dominated news headlines.
Users lost billions of dollars and their lives were turned upside down when the UST stablecoin lost its $1 price peg.
Terra’s effort to revive LUNA was criticized by Dogecoin co-founder Billy Markus, who called individuals who bought into it “really foolish.”
Allegations of manipulating the market
Several reports of questionable activities have been aired by internet investigators and whistleblowers throughout the incident.
All of this points to shady dealings within and beyond the Terra hierarchy.
Allegations include major people manipulating Terra retail investors, top officials benefiting themselves through the Mirror Protocol, and Terra creator Do Kwon’s ties to the failed algorithmic stablecoin project Basis Cash.
Relaunched of LUNA
This method was originally intended for forking the existing chain into a new chain without the UST stablecoin. The announcement of a relaunch on May 16 was first revealed by Do Kwon’s tweetstorm revealing a Terra revival plan. According to the creators, LUNA 2.0 will be an entirely new chain, not a fork. The new chain’s tokens will be delivered by airdrop to “stakers, holders, residual UST holders, and essential app developers” from the previous chain.
On May 25, the community voted “overwhelmingly” to adopt Proposition 1623, opening the door for the launch of LUNA 2.0. The relaunch and token airdrop were supposed to happen on May 27, however, due to an announcement made on that day, it has been postponed until May 28 at 06:00 GMT.
Community not in support of relaunch
The risks of restarting LUNA were explored by Joshua Fernando, co-founder, and CEO of blockchain carbon credit company eCarbon.
Fernando addressed many key issues regarding the relaunch in his email, including The lack of transparency around how LUNA 2.0 will generate value, especially because it will lack a stablecoin component.
When the vesting period ends, investors will be under a lot of selling pressure as they try to recoup their losses and relocate to safer businesses.
Exchanges may have a conflict of interest in assisting the airdrop and restart because they are also attempting to recuperate losses.
The crypto consensus Similarly, there are plenty of messages criticizing the relaunch on Twitter. @Mister Ch0c, for example, compared investing in LUNA 2.0 to rekindling a romance with a cheating ex.
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With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
