Many people think that Luna comeback is possible, Terra will make a return since the firm is just “too huge” for such a catastrophe to be tolerated. Elliptic, a blockchain analytics startup, says that crypto investors lost a stunning $42 billion in total between LUNA and UST.
Do Kwon, Terra’s co-founder, has recently drawn the attention of criminal investigators in South Korea, notably the Grim Reaper squad. He has been charged with tax evasion, among other things, and it is apparent that the Terra leader’s legal difficulties are far from over.
Should they burn?
There are around 6.5 Trillion Luna in circulation, but thankfully they have stopped minting, which I take as they are no longer attempting to conserve UST at the expense of Luna.
Do Kwon’s “Terra Ecosystem Revival Plan 2” is not being well received by the Terra community. Despite the fact that most Terraform Labs users openly criticized the idea, the CEO of Terraform Labs changed the status of his recovery plan to “final” a day after writing it on the Terra Research Forum. The Terra community is pointing to two major issues: the new token LUNA Core distribution not taking into account the circulating supply available at the time of purchase, and ignoring the massive losses suffered by TerraUSD (UST) holders, the algorithmic stablecoin allegedly pegged to the US dollar that collapsed last week by more than 90% to its current value just below $0.1.
Luna comeback hopes vs warnings
Despite South Korean authorities conducting “emergency inspections” of local crypto exchanges “to increase investors’ safety,” Do Kwon is pressing forward with his LUNA recovery plan, which will see Terra Core released on May 21st and a fresh network launch made accessible to validators.
Terraform Labs will conduct a governance vote on Wednesday, May 18, to decide whether to approve a hard fork for Terra, similar to the well-known DAO breach that the Ethereum network faced in 2016, which divided blockchain networks into two coins, Ethereum (ETH) and Ethereum Classic (ETC). In this instance, after the split occurs, the existing worthless LUNA tokens will be converted to Luna Classic (LUNC). Holders, stakeholders, and developers of LUNC will be rewarded with fresh new LUNA tokens with a limit of one billion. If all goes according to plan, the new LUNA network will be inaugurated on May 27th.
$3 billion was’nt enough
Binance CEO and cryptocurrency supporters have criticized Do Kwon’s suggestion to fork Terra’s LUNA to a new chain. The Luna Foundation Guard has spent $3 billion to stabilize TerraUSD’s peg, but UST has not recovered.
Despite the forking strategy, Terra’s LUNA fails to recover.
The Luna Foundation Guard has spent billions of dollars to restore the peg of TerraUSD (UST). However, the UST price is failing to recover. UST is now trading at $0.082, 91.8 percent less than its $1 value.
Da Kwon’s proposals for Luna comeback
Do Kwon, the CEO of Terraform Labs, devised a method to retrieve Terra’s tokens. The Luna Foundation Guard Council advocated forking LUNA to a fresh chain based on a snapshot taken prior to the blockchain assault.
The recovery plan calls for a maximum of one billion coins, with 900 million tokens of the new chain put aside to be restored to LUNA and UST holders from before the de-pegging event and chain hold, and the remaining 100 million tranche to be staked at the network genesis state.
Binance invested $1.6 billion
CZ contacted the Terra team on behalf of Binance to prioritize retail customers and backed the prioritizing of the smallest wallets with UST deposits on Anchor. Binance has roughly $1.6 billion invested on LUNA’s failure.
Kwon has asked for patience from the community while Terraform Labs works on several projects to stabilize UST, repeg it, and drive a LUNA comeback.
Nonetheless, the CEO of CryptoQuant claimed that market maker(s), including those engaged by LFG, delivered 84,000 BTC to several exchanges last week, totaling $2.5 billion. It is unknown if the BTC tokens were sold, but it seems probable that the bulk of the selling pressure was swallowed by Coinbase, and attempts to recover algorithmic stablecoin UST failed.
According to Larry Cermak, VP of research at IntoTheBlock, LFG’s reserves have dropped from $3.1 billion a week ago to $87 million presently, as the non-profit organization has spent roughly $3 billion defending UST’s peg. Despite attempts, the stablecoin failed.