Pursuant to Terra founder Do Kwon’s revival plan, the next generation of the Terra blockchain launched on Friday.
Luna 2.0, a fork of the original Luna blockchain will begin minting its new Luna coin, beginning with aidrops already made through its partners Bitfinex, Binance, LBank, KuCoin, Bybit, FTX, OKX, and Bitrue. The new Luna is currently airdropping to existing owners of the old Luna coin (dubbed ‘Luna Classic’) and to the owners of TerraUSD (dubbed ‘Terra Classic’).
The original Terra blockchain saw Tether (UST) depeg from its U.S. dollar value, with multiple crypto exchanges expressing their support for Do Kwon’s revival proposal. The new LUNA distribution hinges on “pre-attack” and “post-attack” snapshots of the original Terra blockchain, allocating new tokens to users who had stakes in the chain prior to the meltdown.
On Friday, Terraform Labs announced it had captured the post-attack image of the blockchain, and were “assembling a genesis file for the launch.” LUNA is currently trading at $5.51, as of press time, with the most active exchange being Gate.io.
In a tweet, Terra’s team revealed the chain’s production of the first transaction block:
Phoenix Finance, the primary DEX on Terra 2.0, simultaneously launched alongside Terra 2.0, leading the way for more dApps previously running on Terra Classic, to relaunch on Terra 2.0.
Terra 2.0 is still controversial
Responses to the new Terra blockchain have been mixed. While some exchanges like Bitrue are bullish and have announced the anticipated launch of yield farming, businesses like OKX have cautioned users against the risk.
“Please trade with caution, LUNA is still highly volatile.” Galois Capital, whose CEO Kevin Zhou repeatedly sounded warnings about the fragility of the original Terra algorithmic arbitrage system, criticized Terraform Labs’ launch.
“Rug me once; shame on you. Rug me twice; shame on me,” the company tweeted. The company also said inconsistent naming conventions for LUNC and LUNA would dupe trading bots, causing some holders to get rekt.
Kraken, for example, tweeted that it would label the new Luna token LUNA2, while Gate.io indicated via trading pairs to name the new Luna under the ticker LUNA.
Will the biggest losers benefit?
It remains to be seen whether certain users who invested their life savings in Terra will benefit from the new blockchain and airdrop. Data from Nansen, a blockchain analytics company, said that around 265000 crypto wallet addresses had deposited funds into Anchor, a type of crypto bank operated by Terraform Labs, offering yield to depositors similar to an interest-bearing account.
Keith Baldwin, a 44-year-old surgeon from Massachusetts, had amassed $177000 in savings over the past ten years. While not a crypto enthusiast, he entrusted the management of his savings to a startup called Stablegains. He reportedly bought USDCoin with his savings, depositing it in an account offering a 9 percent annual yield.
In April 2022, he moved his USDC holdings into a Terra account offering a 15% yield. Shortly after that, the price of UST and LUNA crumbled, sending Baldwin’s savings down the chute. Stablegains is now slowing down its activities.
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