Cryptocurrency markets have undergone sharp sell-offs after the collapse of the controversial blockchain project Terra.
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A new version of the destroyed cryptocurrency luna is already working on major exchanges – and it started badly.
Last week, supporters of the blockchain project Terra voted for the revival of luna, but not terraUSD, the so-called “stablecoin”, which fell below the alleged peg to the dollar, which caused panic in the crypto market.
TerraUSD, or UST, is what is known as an algorithmic stablecoin. He relied on a code and a sister token, luna, to maintain a value of $ 1. But when digital currency prices fell, investors fled stablecoin, sending UST to fall – and with it killing Luna.
At its peak, the old moon – now known as the “classic moon” – had more than $ 40 billion in circulation.
Now luna has a new iteration, which investors call Terra 2.0. It is already traded on exchanges including Bybit, Kucoin and Huobi. Binance, the world’s largest cryptocurrency exchange, says Tuesday it will list Luna.
Its launch did not go well.
After reaching a peak of $ 19.53 on Saturday, according to CoinGecko, a few hours later the luna fell to $ 4.39. It has since been priced at around $ 5.90.
Analysts are deeply skeptical about the chances of success of the revived Terra blockchain. It will have to compete with many other so-called “Layer 1” networks – the infrastructure that underpins cryptocurrencies such as Ethereum, Solana and Cardano.
Terra distributes luna tokens through what is called “aerodrop”. Most will go to those who kept Luna Classic and UST before their collapse, seeking to compensate investors.
But many investors burned by the disaster are unlikely to believe Terra a second time, experts say. Vijay Ayar, head of Luno’s international crypto-exchange department, said the project was a “big loss of confidence”.