What happened
Earlier this month, the Terra ( LUNA ) blockchain efficaciously collapsed. The breakdown started when stablecoin TerraUSD ( UST ) lost its peg to the U.S. dollar and the built-in arbitrage mechanism failed to resolve the trouble. At that point, panicked investors started selling Luna and TerraUSD hand over fist .
however, Terraform Labs collapse Do Kwon has a plan to revive the break blockchain, and optimism surrounding that design has both coins soaring today. As of 3:00 prime minister ET, Luna and UST were up 62 % and 25 %, respectively, in the last 24 hours .
So what
Kwon discussed his revival plan for Terra in a late blog post. specifically, the blockchain will be forked to create a newly chain, but the raw chain will not include the UST stablecoin. Kwon ‘s plan besides outlines the creation of 1 billion new Luna coins, which will be distributed among developers alongside pre- and post-crash holders of Luna and UST .
The vote menstruation is placid overt, but the proposal has already surpassed the brink for borrowing, and the branch is set to take place on May 27. At that meter, the previous chain and cryptocurrency will be known as Terra Classic and Luna Classic, while the new chain and cryptocurrency will be known as Terra and Luna. Of course, Kwon ‘s marriage proposal does not guarantee that investors will recoup all crash-related losses. The market will have to decide what the newfangled Luna mint is deserving.
Now what
Terra was once a thrive ecosystem of decentralized finance ( DeFi ) services. Anchor ( ANC ) was the crown jewel, a lend protocol that paid 20 % interest on UST deposits. But the platform included a phone number of other noteworthy applications. The Mirror protocol allowed investors to trade synthetic assets, and the Chai payments app had over 2 million users in South Korea.
After the blockchain ‘s collapse, the future of the Terra ecosystem is questionable at best. The relationship between UST and Luna was the primary reservoir of rate. DeFi products like Anchor were designed to drive demand for UST, and Luna was designed to absorb stablecoin price volatility. To that end, Luna was supposed to become more valuable as necessitate for UST increased. alternatively, the opposite happened and investors lost over $ 40 billion.
even if the new blockchain earns the faith of the crypto community, Terra wo n’t be the same without its native stablecoin. For that reason, I think this is a “ watch and wait ” position. Terra may regain its erstwhile glory, or it may fade into the background of the crypto industry .
