almost 2 years ago • 2 mins
You probably heard about Terra’s catastrophic downfall in May, when – between the collapse of its stablecoin and its Luna token – the former blue-chip blockchain lost $60 billion of value. Well, in a frantic bid to reinvent itself, Terra has now forked into two separate blockchains.
The first of those chains – now called Terra Classic – is the one you’re already familiar with: it plummeted when its stablecoin unpegged from the US dollar and a series of events shattered confidence in the project. This, at a time when crypto sentiment was already on the ropes. One thing led to another, and a bank run on Terra’s blockchain saw the project implode into a shadow of its former glory.
The second blockchain is new, and brings with it a new token: they’re now respectively known as… Terra and Luna. This new version doesn’t have stablecoins, and will instead try to compete with “Layer 1s” like Ethereum, Solana, and Avalanche. And as a way of making up for all the turmoil, Terra “airdropped” the new Luna token to holders of the original Luna (now exhaustingly known as Luna Classic).
It’s too soon to tell how this plays out, but Terra has a lot of work to do to regain investor confidence. That much is clear from the chart above, which shows that new Luna plunged by around 78% to $4 a coin soon after it started trading on Bybit on Tuesday. Luna’s price is now sitting at around $7, with 70% of new tokens yet to be airdropped (in turn potentially diluting the token’s value) over the next couple of years.
But the crypto market is notoriously one of short memories and redemptive comebacks, and it’s not impossible that Luna will pick up pace the further from this debacle we get. So if you see yourself as a risk-taking dip-buyer, Luna might still hold some appeal…
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