If you want to be reminded that memories are short in the world of crypto, look no further than the relaunch of the Luna token that played a key role in the collapse of the Terra blockchain ecosystem that saved investors billions just over two weeks ago. cost.
Hype is already building around the cryptocurrency, which is being reissued as part of a proposal approved on Wednesday. The plan aims to save the network after Luna’s affiliated stablecoin, TerraUSD (UST), lost its 1-to-1 peg to the dollar and caused a collapse in digital asset prices.
Under the approved measure, the original blockchain will be spun off and will be known as Terra Classic, while Luna, which has fallen close to zero this month, will be rebranded as Luna Classic with the ticker LUNC. The new Terra blockchain will run a coin under the existing Luna name and ticker, and will not include the UST stablecoin. The new Luna will be distributed to previous holders of Luna and UST in a so-called airdrop on Thursday.
Crypto exchanges are already announcing plans to list the token, while proponents predict it will rise, using the industry parlance of “to the moon.” This is probably not too surprising given that, like gambling, the crypto trading world often follows classic “loss-chasing” patterns, where investors can increase their efforts to push the success of the new blockchain in a bet to eventually recoup. their previous losses.
luna 2.0 will show the world how stupid crypto gamblers really are
— Shibetoshi Nakamoto (@BillyM2k) May 25, 2022
Thousands, if not millions, of investors have lost money due to Terra’s collapse, with the prices of Luna and UST both dropping to near zero at one point. Luna’s price rose about 18% on Wednesday but stayed at less than a fraction of a cent, data collected by Bloomberg shows. It traded for over $100 in April.
Whether the price of the new Luna token will “pump” remains unclear. In addition to preserving existing projects on the Terra blockchain, the new blockchain also needs support from major exchanges. If the new Luna token is listed on a major exchange, the token would gain more liquidity, which could lead to a valuation of its value. Crypto exchange Huobi said they would support the launch of Luna 2.0 while OKX said it would support the airdrop of the new Luna tokens. Binance, meanwhile, said it is “working closely with the Terra team” to provide affected Binance users with the “best possible treatment”.
Are you ready for “LUNA Rebirth”?💙 https://t.co/Vn1FFwlc4y
— Huobi (@HuobiGlobal) May 25, 2022
Despite the exuberance, blockchain data firm Nansen points out that flows of packaged Luna tokens, a version of Luna on the Ethereum blockchain, have “no evidence” of actual broad support yet.
The trading volume of packaged Luna tokens on Ethereum and the flow of Luna tokens going from Ethereum to Cosmos, the network Terra is building on, has been “scarce” since the launch, according to Andrew Thurman, who is responsible for content at Nansen. approval of the new proposal. †
“That may change as the news spreads, but at the moment it looks like the market is lukewarm on Terra [2.0]Thurman said.