The relaunch of Terra’s new Luna token has witnessed a dull start and failed to impress the investors who received the new tokens following last month’s collapse of the cryptocurrencies tied to the failed Terra blockchain.
The original Terra Chain has been rebranded as Terra Classic and Terra has been relaunched as Terra 2.0 as developers behind failed stablecoin TerraUSD voted to abandon the token in favor of creating a new blockchain and digital asset weeks after the cryptocurrency collapsed.
The original blockchain was split off and be known as Terra Classic, while Luna, which plunged close to zero last month, was renamed Luna Classic with the ticker LUNC. The new Terra blockchain does not include a stablecoin.
The average price of the Luna 2.0 token has remained below $11 in the last week since they were distributed by Terra, according to data complied by tracker Kaiko.
While there is not a widely recognized data point to calculate a market value for Luna 2.0, a rough estimate by data tracker CoinMarketCap puts the total value at about $1.37 billion. That is based on 210 million new Luna tokens in circulation, using amounts claimed by the those who run the Terra project, as per Bloomberg.
“The airdrop was really poorly structured. It rewarded equity holders -LUNA holders, over savers or bond holders, Anchor depositors or UST holders,” Thomas Dunleavy, a senior analyst at crypto research firm Messari told Bloomberg. “Any network in crypto is built on trust, by not only users but also builders who commit their time and capital to grow the network.”
Luna had a market value of about $27.8 billion on May 6, before it crashed. UST was designed to maintain its dollar peg through both algorithms and trading incentives involving Luna.
Unlike most other major stablecoins which are backed by other assets, TerraUSD’s value was derived by complex algorithmic processes, linked to another paired token called Luna.
(With inputs from Bloomberg)