Terra’s Forked LUNA Token Falls 70% a Day After Debut
Terra has revamped its blockchain ecosystem with its latest LUNA token having experienced a battering amid its market debut
Do Kwon, CEO of TerraForm Labs | Blockworks Exclusive Art by Axel Rangel
key takeaways
- The token was last seen changing hands for around $5.69, following a 24-hour peak of $19.54
- Trading volume has also dropped by more than half as activity from an extensive sell-off begins to cool
The latest iteration of the Terra blockchain (Terra 2.0) is off to a rocky start with its native token LUNA having fallen considerably following the chain’s debut on Saturday.
LUNA, the retooled token of the same name, fell more than 70% Sunday following a swift sell-off after listing on crypto exchanges Bybit, KuCoin, Gate.io and Huobi.
The token was last seen changing hands for around $5.69, following a 24-hour peak of $19.54. The new LUNA had initially listed on Bybit for around $3.63, data from provider CoinMarketCap shows.
Trading volume for LUNA over a 36-hour period has also fallen alongside its price, posting a 64% drop in activity from a peak of around $393.4 million to around $145.3 million.
Terra’s collapse sent shockwaves through the crypto market earlier this month after the blockchain’s then-native algorithmic stablecoin, UST, began to de-peg from the US dollar. The stablecoin was last seen changing hands for $0.03.
After multiple failed attempts to bring UST back to parity, the original LUNA token — linked to UST by design — also fell 99% from a May 9 peak of $66.51 to less than a cent three days later.
Following the fallout, Terraform Labs, the main developer of the Terra/LUNA ecosystem, proposed to split the chain in an attempt to assuage angry investors and restore faith in its brand.
A week-long vote, last week, resulted in 65% of LUNA holders opting to fork the battered chain. A renamed Terra Classic alongside its native asset Luna Classic (LUNC) have been kept as the original chain and token, while the newest iteration takes the form of the old Terra and LUNA branding.
The new chain promises to be a “fully community-owned” network, with several addresses tied to the project having been removed from its airdrop whitelist.
Still, not all are impressed by the new facelift, with some angry at the lack of clarity and compensation provided to those who lost hundreds of thousands and even millions of dollars worth of tokens.
An investigation into the Luna collapse is underway in South Korea where employees of Terraform Labs have been summoned for questioning and ordered to submit materials, local news outlet JTBC reported Saturday.
Blockworks attempted to contact Terraform Labs but did not receive a reply by press time.
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