If you’ve been paying attention to cryptocurrency news recently, you already know that earlier this month, LUNA lost its peg and completely plummeted in value, along with Terra UST, losing 99.9% of its value. And all of this happened in less than a week, resulting in one of the worst crashes in crypto history.
The recovery plan
Although this happened just a few weeks ago, apparently it is old news as Terraform Labs is already launching a new blockchain to revive the fallen coins.
This blockchain will not replace the old one, nor will it share history with it. Instead it will be a new blockchain running parallel. The old one will be referred to as Terra Classic now that Terra 2.0 is on the scene. And the old LUNA coin will now be Luna Classic (LUNC).
Revival plan 2
It may seem far-fetched that a company that saw such a dramatic and public tumble could make a turnaround so quickly. And even if it did, would anyone back it? Would anyone invest? Well, that question may be partially answered by the fact that founder and CEO Do Kwon made a proposal for the revival plan, which was just voted on and approved.
Not only that, but Binance, one of the largest crypto exchange platforms, showed support in a tweet that said, “The Terra community just passed a vote to ‘Rebirth Terra Network.’ We are working closely with the Terra team on the recovery plan, aiming to provide impacted users on Binance with the best possible treatment. Stay tuned for further updates.”
So, following the stablecoin collapse, LUNA 2.0 will aim to rescue the Terra Luna ecosystem. Do Kwon posted his proposal, stating that while UST has been central to Terra’s growth story, the developer ecosystem that has formed around it is worth preserving. Also in this proposal are plans on the new blockchain for tokens to be distributed to previous holders of LUNA and UST in an airdrop.
Will a new blockchain and support from some reputable companies be enough for Terra Luna to rise from the ashes? We will have to wait and see. As always, investors should do their own research and only invest money they can afford to lose, especially when it comes to cryptocurrency.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Katie Clinebell has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Terra. The Motley Fool has a disclosure policy.