Blockchain TERRA 2.0 is approved and will be launched tomorrow, what should you know?

Veny Cespedes West

Disclaimer: The information provided in this section does not represent investment advice.

The Terra ecosystem has been trending on social networks for the last month, after its crash in the crypto market, going from +100 USD/LUNA to being worth only a thousandth of a dollar.

TerraUSD (UST) is an algorithmic stablecoin pegged to the dollar and backed by the Terra (LUNA) cryptocurrency. If UST fell below $1 USD, more LUNAs were produced to return to parity.

Following an alleged liquidation attack, the TerraUSD (UST) stablecoin lost 1:1 parity to the US dollar on May 12, causing a collapse in the Terra ecosystem as the LUNA cryptocurrency was overvalued. 100% of its value upon reaching 6 trillion units.

Millions of people and several investment funds lost 100% of their investments in LUNA and UST in a few hours.

The collapse of the Terra ecosystem is credited with part of the crypto market crash.

At the beginning of the collapse, Luna Foundation Guard made a loan of 80,000 BTC to TerraUSD (UST) to maintain parity with the dollar, however, this effort was insufficient. In the following days, when UST had lost 90% of its value, LFG announced that its capital reserves had fallen to just $80 million backed by AVAX as its principal investment, followed by BNB and a remaining 313 BTC.

The Terra ecosystem had a capitalization of more than $50 billion dollars, according to data from CoinMarketCap at the time of writing this article, the capitalization is 1 billion.

The proposal presented in the Terraform Labs (TFL) forum by Do Kwon CEO of TFL and which was approved with +200 million votes in favor, aims to create a new blockchain that excludes its failed stablecoin TerraUSD (UST).

The intent of Terra 2.0 is to fix bugs, exclude the 6 trillion LUNA overproduced, exclude UST, and compensate losses to LUNA and UST investors before and after the attack.

Terra v1 will continue to exist: Luna is renamed Luna Classic (LUNC) and TerraUSD Classic (USTC).

The NOX Bitcoin centralized exchange with operations in Brazil reimbursed 100% of the losses caused by UST to all clients who qualified according to its return policy for this occasion.

  • Terra 2.0 release and distribution

As shown on the official Terraform Labs website (terra.money) the official launch of the mainnet will be on May 27 with an initial distribution of 1 billion tokens.

70% of the launch tokens will be distributed between LUNA and UST holders before and after the attack, as reported in the Terra proposal.

Several exchanges including Binance, OKX, FTX and Gate.io have announced on their official pages that they will support Terra 2.0 and the distribution of the new tokens.

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NOTICE: If you are an investor affected by Terra v1, you will need to check with your Exchange about obtaining launch tokens on Terra v2 and their policies. I also invite you to learn more about the ongoing new implementation directly on Terra Agora https://agora.terra.money/t/terra-ecosystem-revival-plan-2-passed-gov/18498

Source: CoinMarketCap, Terraform Labs.

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Hello, I'm Veny West, a journalist in the crypto world. I deliver unbiased news with valuable information about the world of web3. ¡Pura Vida! ₿ **No financial advisor**

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