LUNA 2.0 collapses several hours after its launch

Terra's new token plummets 70% within hours of its launch

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The LUNA 2.0 token plummeted by 70% just a few hours after its launch.

On Saturday, May 28, the new version of the Terra blockchain, “Terra 2.0”, was activated. At first, the mainnet launch was scheduled for Friday the 27th, however, it had to be delayed one day due to problems unspecified with development. 

Finally, the new blockchain was launched early Saturday and the token was tagged on most exchanges as LUNA2. At first, the token It was launched with a price of almost $20. However, in less than 12 hours, it had already lost more than 70% of its value, trading below $6. At the time of writing, the token is priced at $6,10, according to data from CoinMarketCap.

The new currency will have a total supply of 1.000 billion, of which only 21 million have been launched on the market. The rest will be distributed in different phases, with a dressing linear, over the coming months and years.

The Terra Fork

Following the Terra and UST debacle, Do Kwon, CEO of TerraForm Labs, initiated a governance proposal to start a fork in the blockchain, with the aim of creating a new blockchain.

On Wednesday, May 25, the community vote ended and Kwon's proposal was approved with 65,5% of the votes in favor. In this way, a completely new blockchain was created, Terra 2.0, while the original blockchain was renamed Terra Classic and its token LUNA Classic (LUNC). 

Beyond the name of their tokens, there is another big difference between the two blockchains; in Terra Classic the failed algorithmic stablecoin UST remained, while in Terra 2.0 there would be no stablecoin.

The launch of the new blockchain will be accompanied by an airdrop of LUNA tokens for those users who were seen affected by the fall of LUNA and UST. The airdrop will be distributed as follows:

  • 30% to the community pool.
  • 25% to LUNA holders before the attack.
  • 10% to UST holders before the attack.
  • 10% to LUNA holders after the attack.
  • 15% to UST holders after the attack.

The problem with the new Terra blockchain

Despite the creation of the new blockchain, the majority of users are skeptical about the project, due to the problems caused by the crash of LUNA and UST, which have caused million-dollar losses to investors. 

On the other hand, Terra's fall has been surrounded by much controversy with its CEO, Do Kwon, embroiled in accusations of fraud and with rumors of a possible prosecution by Korean regulators.

This has led many users to position themselves against the new cryptocurrency, posting messages on Twitter calling on investors to do not buy Luna 2.0, pointing out that sometimes you have to accept defeat. 

Another part of the community has shown their support for the original LUNA, now Terra Classic, and has asked investors to leave aside Terra 2.0 and continue buying LUNC. However, the token continues to decline and yesterday marked losses of up to 29%. 

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