LUNA 2.0: 5 Things To Know Before Investing
New LUNA investors must keep in mind that the price might shoot up exponentially, or drop rapidly.
Terra LUNA fell from a peak of more than $117 in April 2022 to barely one-hundredth of a cent in May after its algorithmic stablecoin, UST, lost its peg. With selling pressure increasing, UST never touched the $1 peg. It led traders to print LUNA massively, resulting in a significant crash of the entire ecosystem. After the collision, Terra came up with a revival plan and created a new blockchain with its crypto. It has led investors to question how different Terra 2.0 is from the original one to decide whether to invest or not. Here is all investors should know about LUNA 2.0.
1. The original LUNA is now Luna Classic
According to the new plan proposed by the Founder of Terra, Do Kwon, the Terra blockchain undergoes a hard fork. With the launch of Terra 2.0, the older LUNA token will be renamed Luna Classic (LUNC). This proposal of Kwon has received a majority support of 65.5 percent.
Now, the new Terra will be created without the algorithmic stablecoin and will be rebranding the original Terra chain into Terra Classic. The original Cosmos chain will still be operational, and the option to burn or mint will be disabled.
2. New tokens are to be airdropped
The new LUNA tokens have started being airdropped to eligible holders of UST and LUNA. But who will be receiving these airdrops?
•The community pool will be receiving 30 percent of the tokens, with 10 percent marked for developers.
•Pre-crash LUNA holders will be receiving 35 percent of the new LUNA tokens, and UST holders with 10 percent.
•The new LUNA holders, after the crash, will be receiving 10 percent of the new tokens, and UST will be receiving 15 percent of the tokens.
•Additionally, a significant portion of the token was also allocated to Terra dApps developers to make the ecosystem successful, ensuring better security.
3. Exchanges and listing of new LUNA tokens
The world’s biggest cryptocurrency exchange by trading volume, Binance, has listed the new LUNA 2.0 tokens under its ‘Innovative Zone.’ It is a space for the new and high-risk tokens where investors can get exposure to innovative projects. Before the project was listed on Binance, the price jumped from $7 to $11.97.
Other exchanges like OKX, KuCoin, Bitrue, FTX, Bitfinex, Gate.lO, and Bybit have also listed the new LUNA coin. All the exchanges will be supporting Terra’s airdrop of the new tokens.
4. Sloppy launch and faulty airdrop distribution
Several previous investors reported on various platforms that they didn’t get the airdrop even though they were eligible. The Terra team ultimately acknowledged their mistake and promised to make amends. Such instances lower the trust of the community in the project. It was even evident in the price action as LUNA continued to face the wrath of the sellers.
5. Volatility
Once a project goes through so many hurdles and the team continues to be sloppy around implementing a revival plan, there is bound to be extreme volatility. New investors of LUNA should keep this in mind before jumping in now. The price might shoot up exponentially, or it could drop rapidly.
The author is the CEO and Co-Founder of Mudrex, a global algorithm-based crypto investment platform.
[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt. Ltd.]
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