Back from the Dead 😵

Back from the Dead

A few weeks ago, a company called Terraform Labs, which maintains the open source blockchain called Terra, completely collapsed. Terra creates algorithmic Stablecoins designed to track the price of a fiat currency consistently. In this event, Terra’s algorithmic Stablecoin pegged to the dollar called “UST,” collapsed. The crash occurred because, last week, over $2 billion worth of UST was unstacked for an unknown cause, pushing Terra to $0.90 and destabilizing the peg, causing Luna to fall from $116 to just a penny and UST to fall to as low as 30 cents. In attempts to save the company and the Stablecoin, The Luna Foundation Guard said it transferred 52,189 Bitcoin to “trade with a counterparty” as UST collapsed below its peg.

Since then, Luna and Terra have been in ruins. But even with all hope lost, the Terra community and its developers have decided to regroup and launch somewhat of a “Terra 2.0.” The idea scraps the former centerpiece of the project and Stablecoin “Terra,” which helped trigger the collapse. In the revived version of the project Terra plans to distribute tokens to holders of the old Luna, soon to be renamed “Luna classic,” and UST tokens. Investors and developers appear mixed on whether the revival will succeed, and if Terra is even needed, given the number of alternative platforms with developer activity.

What do you think about the revival, and will Luna Classic perform well as a token?

I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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