Terra 2.0 was launched with the promise of assisting in recovering lost funds, but many people are of the idea that creating a new token to compensate for the failure of another is not a good idea.
Terra remained the focus of top headlines in the entire month of May following the collapse of its tokens that resulted in the loss of investors’ USD 40 billion. Even with the initial resistance from the community, the founder of Terra, Do Kwon, still managed to relaunch the collapsed network with a new chain going by the name Terra 2.0.
Terra 2 Launched with New Conditions, Gets Support from Top Exchanges
The new proposal for the relaunch raised the genesis liquidity, which introduced a new liquidity profile for pre-attack Luna Classic (LUNC) holders. It also decreased distribution to post-attack TerraUSD Classic (USTC) holders, resulting in a huge support by 65% of the community.
The new blockchain went live on 28th May 2022 after a hard fork of the old chain. The new token stays Terra (LUNA), and the old one is now rebranded to Luna Classic. Holders of LUNC, USTC, and anchor protocol UST (aUST) were eligible to receive the new tokens.
Even with the industry against Kwon, and the mother company, Terraform Labs facing a chain of lawsuits and investigations, a number of exchanges such as KuCoin, Bitfinex, and Binance, have expressed support for the Terra 2.0 chain.
Kraken CEO Jesse Powel was also quick to defend LUNA, indicating that it is the community that is demanding. However, he pointed out that listing is not an endorsement. “As an exchange, Bitrue’s main priority is customer satisfaction, as it’s only right that we give our Bitruers the freedom to invest in assets of their choice …,” added Powel.
Terra Highly Volatile, Kwon Associated with Other Failed Projects
The launch of the new network was considered a sort of frenzy, with some investors indicating they never got compensated during the airdrop. Some called it a mockery.
After the airdrop, the token experienced heavy volatility, with its price dropping by 70%. Most of those who received the tokens sold them immediately.
Apart from the collapsed algorithmic stablecoin, Knon was also behind Basis Cash (BAC), another failed stablecoin project. What builds the case against Kwon is his reluctance to try and foresee problems and act promptly. Experts had warned against backing the UST with a volatile asset, but Kwon never took note.
Although the community cannot be blamed for supporting the new project because it is looking forward to recovering lost resources, Kwon taking charge again could result in challenges ahead.