Do Kwon, a co-founder of Terraform Labs, was behind Proposal 1623, which called for the creation of a new Terra blockchain and the abandonment of the failed UST stablecoin and Luna Classic (LUNC) tokens. After debuting on May 28, Luna 2.0 is already operational, but there are still many unresolved questions and concerns regarding everything that occurred between the moment UST crashed and the launch of a new token.
The tokens were issued at $17.8, according to Coinmarketcap data, and finally soared to $19.53 on May 28. On Monday, however, it went down almost 70% to $5.45 in less than 48 hours.
Both holders of the project’s depreciating UST stablecoins and holders of the older, existent Luna tokens received fresh Luna tokens in Terra’s proposal to resuscitate the project. Formerly valued at more than $40 billion, the older coins renamed as Luna Classic (LUNC) have a market valuation of less than $1 billion.
The Airdrop of LUNA – Was it Fair?
On May 16, this Terra Ecosystem Revival Scheme was released and it contained a plan to “reimburse” LUNA and UST investors who were harmed by the crash. The new Terra tokens were to be given out as an airdrop to these investors.
The intention was to airdrop tokens to pre-attack holders at Terra Classic block 7544910 and post-attack holders at Terra Classic block 7799000, respectively. The airdrop has already taken place on most exchanges; however, it has been met with widespread criticism from the community.
The arrangements decided for distributing LUNA Airdrop
One of the criticisms levelled at how this airdrop was carried out is that it ignored the investors who rushed in to buy the old Luna, now known as LUNC, in order to save money.
Despite Terraform Labs continuing to issue more tokens in vain to save the UST peg, many investors acquired Terra at low prices. These investors have been left out of the airdrop because they will receive the least share of the airdrop, according to the airdrop instructions.
Your capital is at risk.
Team Terra’s Response to the LUNA Airdrop Complaints
Some users also complained that they did not receive the precise number of tokens that the project promised. The Terra team acknowledged the problems and stated that they were working on a solution, but did not provide a specific timeframe for when the issue would be resolved.
The Team Terra’s Twitter handle posted a tweet shortly after stating, “Attention LUNA airdrop recipients. We are aware that some have received less LUNA from the airdrop than expected & are actively working on a solution. More information will be provided when we have gathered all of the data, so stay tuned.”
What Investors Think about LUNA After the Crash
There are now apprehensions that the community will lose faith in Terra as a result of the airdrop incident, even as Do Kwon and Terraform Labs work to restore their faith in Terra LUNA. The fate of the community’s faith in Terra will be determined by how the airdrop situation is handled.
According to market players, it is not apparent how, and reserve assets required to maintain the coin are not transparent. They claim that things are unlikely to alter very soon.
Crypto.com resumed Trading of LUNA2/USDC Pair
The VP of Research and Strategy at EarthID, Mr Sharat Chandra said that “Hard forking the chain without addressing the underlying algorithm that failed to keep the peg was wishful thinking for the founder and community members who voted for Terra2.0.”
The Terra ecosystem has lost the trust of investors, he noted, and a simple change of chain nomenclature without addressing the core cause of the catastrophe will not aid Terra’s resurrection.
Your capital is at risk.
Mr. Vikram Subburaj, CEO of Giottus Crypto Platform, stated that the new Luna 2.0 coin is currently being airdropped to existing LUNA and UST holders. He also noted that because the airdrop and vesting schedule necessitates that LUNA’s trade liquidity is restricted, certain exchanges have commenced trading. As a consequence, he predicts that trading prices will be quite volatile for the first two months or so.
Luna faces an unclear future, and investor disappointment could make algorithmic stablecoins obsolete. It’s certain that the founder and the company would have to make extreme efforts to regain the trust while making the fundamentals of the crypto strong.
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