Following the Terra LUNA fiasco, the crypto community as a whole. It has seen an unexpected crypto market crash in the last few weeks. Everything came crashing down after the LUNA token was de-pegged from its $1 parity, leaving many investors with nothing as LUNA went to $0.
The Terra community has now voted on and approved a LUNA 2.0 proposal. It essentially stated the introduction of a new chain fork with numerous changes.
So, as support for Luna 2.0 crypto exchanges becomes available, let’s take a look at what Luna 2.0 is all about?
What is Terra’s Luna 2.0?
Luna 2.0 is a brand new Terra blockchain token designed to save the Terra Luna ecosystem following the collapse of the stablecoin. TerraForm Labs founder Do Kwon’s proposal, dubbed the Luna rebirth, sees a new chain replace the existing Terra network. Luna 2.0 will also replace the current version of Luna. It has severed ties with the UST stablecoin, which caused the crash in the first place.
In addition to the new chain, most dApps will migrate to the new chain in the first few days. According to Terra, most other features will be carried over.
Let’s talk about the Launch of Luna 2.0
As LUNA could transit from the ruins caused by the de-peg event, the big day must have finally arrived. On the day of the launch, an official announcement was made. The creators stated that the community has been working around the clock to coordinate the launch of the new chain. While the timeline was subject to change, the team was able to launch Terra 2.0 on time.
One of the event’s clear highlights would be the obvious parting ways with the algorithmic stable coin. Other noteworthy events include the distribution of the pre-ultimate-genesis.json file to Terra validators who are taking part in Genesis by TFL.
The collection of all validator gen txs. Furthermore, it was discovered that the majority of the applications will be retained. This includes:
- Astroport
- Prism
- RandomEarth
- Spectrum
- Nebula
and many others.
Why did Luna crash?
In some circles, the 30-year-old Do Kwon had a reputation for arrogance on Twitter, so some believe it was a personal attack as well. Charles Hoskinson, the founder of Cardano, proposed one theory “A large corporation borrowed $100,000 in Bitcoin from the Gemini exchange. They then exchanged a large portion of that BTC for UST over the counter (OTC) at a discount with Do Kwon. He agreed, reducing UST liquidity.”
That institution allegedly then dumped large amounts of both BTC and UST on the market, resulting in a liquidation cascade of leveraged longs, slippage, and panic selling by investors, many of whom sold their LUNA holdings and unstacked their UST to sell it.
None of these claims has been verified, and Gemini has denied making such a loan. Market manipulation, on the other hand, is common in financial markets.
What does the new Terra 2.0 look like?
Terra 2.0 is the most recent version of Terra (LUNA) developed by Do Kwon as part of a revival plan. The goal is to propose a fork of the Terra blockchain as well as an airdrop to crypto investors who have been affected by the recent crash. The main goal is to restore trust in this stablecoin through the Terra ecosystem’s new venture.
Terra 2.0, according to Terra, will essentially create a new Terra chain without the algorithmic stablecoin. Terra Classic (token: $LUNC) will be the old chain, and Terra (token: $LUNA) will be the new chain. The chain upgrade will begin shortly after the Launch snapshot.
The new Terra effectively establishes a new blockchain linked to the Luna token. The old Luna will be replaced by Luna 2.0, effectively ending the relationship with the failed stablecoin.
However, the old Luna will not be completely replaced; rather, it will coexist with the new and improved Luna 2.0. Holders of the old Luna, now renamed Classic, and UST tokens will receive a portion of the new 1 billion tokens.
Luna holders will receive approximately 35% of all new tokens, 10% will go to those who held UST before the cryptocurrency’s collapse, 25% will go to traders who still own Luna and UST after the crash, and 30% will go to a pool of Luna investors.
What is the Future of Luna 2.0?
The massive Luna crash shook the cryptocurrency market, causing a loss of $60 billion (€55.8 billion).
Nonetheless, it appears that investors are interested in the Luna rebirth. According to CoinGecko data, Luna increased by more than 20% on Wednesday following Terra’s announcement. Even UST was up more than 50%.
Getting rid of the stablecoin that caused Luna to crash in the first place may increase the likelihood of the new crypto’s success, but anything can happen in this volatile crypto market.
Carret does provide a platform to invest in the new Luna 2.0 in India, but it is advisable to invest in relatively less risky crypto like Bitcoin, Ethereum, or stablecoins like USDC and stake them on Carret to earn up to 17% interest annually as Terra Luna is more volatile among top cryptos in India.
More about it later in this blog.
Coming back to Luna 2.0, Let’s talk about Luna 2.0 Airdrop
One of the most hotly debated topics in the crypto ecosystem is the LUNA 2.0 token airdrop and how it will be distributed to LUNC token holders.
What is Pre-Attack?
As the Terra Network Airdrop became a reality. In this scenario, Pre-Attack refers to any LUNA or UST holders or traders who had these tokens in their crypto wallet before the Terra network fiasco.
- Pre-attack LUNA holders will receive: 35%
- Pre-attack UST holders will receive: 10%
What is Post-Attack?
Post-Attack holders, like Pre-Attack holders, are traders who purchased LUNA or UST during the de-pegging period or who purchased a few tokens upon the announcement of the Terra LUNA 2.0 Airdrop.
- Post-attack LUNA holders: 10%
- Post-attack UST holders will receive: 15%.
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