November 28, 2022

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The New Luna Cryptocurrency Is Already Broken

The New Luna Cryptocurrency Is Already Broken

Cryptocurrency markets experienced a massive sell-off after the collapse of controversial blockchain project Terra.

Dan Kitwood | Getty Images

A new version of the collapsed cryptocurrency Luna is already on the major exchanges – and it’s off to a bad start.

Last week, supporters of the Terra blockchain project Vote to revive Luna But not terraUSD, the so-called “stablecoin” that fell below its intended dollar peg, causing panic in the cryptocurrency market.

TerraUSD or USTis what is known as arithmetic stablecoin. It relied on a token and its sister code, Luna, to maintain the $1 value. But as the price of cryptocurrencies plummeted, investors fled stablecoin, causing treasuries to collapse — and taking Luna with it.

At its height, the old luna – now known as the “Luna Classic” – had a circulating supply of over $40 billion.

Now, Luna has a new version, which investors are calling Terra 2.0. It is already traded on exchanges including Bybit, Kucoin, and Huobi. Binance, the world’s largest cryptocurrency exchange, says it will list Luna on Tuesday.

Its launch did not go well.

After peaking at $19.53 on Saturday, Luna fell to $4.39 just hours later, according to CoinGecko data. It has since settled at around $5.90.

Analysts are deeply skeptical about the chances of success of the revived Terra blockchain. It will have to compete with a host of other “layer 1” networks — the infrastructure that supports cryptocurrencies like raisedAnd the Solana And the Cardano.

Terra distributes tokens from Luna through a so-called “airdrop”. Most will go to those who owned the Luna Classic and Floor Cabinets before they collapsed, in an effort to compensate investors.

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But many investors The disaster burned him You are unlikely to trust the Terra for the second time, experts say. Vijay Ayyar, head of the international division of Luno crypto exchange, said there was a “significant loss of confidence” in the project.