Ammara
Experts See No Future For Luna 2.0 – Is The Terra Community Totally Done?
Back in early May, the Terra ecosystem collapsed, send UST and Luna into a downward spiral. Luna’s price fell from over $100 to below a penny. UST lost it’s USD peg and inflicted even more pain to its holders. Basically, UST has become worthless. Even Terra’s developer team at TFL and founder Do Kwon seem to have abandoned it.
The launching of Terra 2.0 with newly minted tokens, dubbed Luna 2.0, hasn’t see much success either. The new coin traded at a fairly good price at the beginning, recording around $19 in price. That’s before things went south the token’s price fell continuous, all the way down to the current $2.9 (as shown on CoinMarketCap).
Terra Under Probe
The woes mounting on Luna 2.0 may be related to the baggage that came with the collapse of the original Terra Luna and UST. Do Kwon and his company are currently under investigation both in South Korea and the US.
In South Korea, the authorities are probing TFL employees for what they term as the embezzlement of the BTC reserves that were meant to prop up UST and maintain the USD peg. Do Kwon and TFL are also charged with tax evasion amount to close to $80 million. In the US, TFL and Do Kwon are under investigation in connection to UST’s status. The US SEC has wants to establish whether UST was issued as an illegal and unregistered security.
research analyst at Kaiko said to Bloomberg:
“Luna 2 will have a difficult time distinguishing itself in a crowded L1 ecosystem with large players like Avalanche and Solana and of course Ethereum. While the original Terra had a fairly robust ecosystem, much of that activity was centered around UST and aUST (UST earning yield in Anchor). Additionally, some of the price action was based around the burning of LUNA to create UST. So now Luna 2 doesn’t have this mechanism, will be facing inflation in the form of vesting/unlocks, and obviously has the baggage of being tied to the largest ever crypto collapse. So it will definitely be a tough path forward.”
founder and CEO of KoinBasket:
“Everyone wants to exit the new Luna as the founder Do Kwon has lost credibility among the community. Luna has no future. The founder didn’t build firewalls around the algo even when they had an opportunity to do so. That’s why they have lost credibility. Building the new Luna within the existing community will not make any sense now. Smart money will move to fundamental coins from such risky coins.”
Mati Greenspan, founder of Quantum Economics told blomberg
“Luna 2 was never meant to survive, it was simply a mechanism for some who were heavily invested to recoup some of their losses at the expense of new money coming in from the hype. I don’t see any reason for the price to go up ever.”
research analyst at Messari said:
“Terra 2.0 suffers from multiple problems. It has gone live in an unfavorable macro and crypto environment. Without an algorithmic stablecoin, it has no clear point of differentiation from other smart contract platforms. Finally, the regulatory overhang is a key concern in investors’ minds.”
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