TERRA is relaunching its Luna crypto token after a crash which saw investors lose billions in just two weeks.
Here’s everything you need to know.
What happened to Luna?
Luna and TerraUSD (UST) are the native tokens of the Terra network, a blockchain project developed by Terra Labs in South Korea.
Terra’s goal was to be a peer-to-peer electronic cash system.
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Terra USD (UST) was pegged to the US dollar, which meant one UST was always supposed to be worth around the same as one dollar.
This was done using a contract-based algorithm.
UST was kept around $1 by burning (destroying) Luna tokens in order to mint (create) new UST tokens.
UST, however, lost its peg to the dollar and the cryptocurrency started to fall.
There is currently no official reason why this happened.
This meant the algorithm issued more Luna tokens to try and recorrect.
The total supply of Luna went from around 725 million tokens on May 5, 2022 to around 7 trillion on May 13, 2022.
This caused Luna to lose 99.9 per cent of its value.
The cryptocurrency, which was valued at over $100 in April, is now worth next to nothing.
What is Luna 2.0?
A proposal from the founder of Terra, Do Kwon, to salvage the project was approved on Wednesday, May 25.
The original blockchain will split and become known as Terra Classic, while Luna will be renamed Luna Classic (LUNC).
A new Terra blockchain will then be created and start a coin under the existing Luna name (LUNA) but won’t include the UST stablecoin.
Terra said: “Terra 2.0 will effectively create a new Terra chain without the algorithmic stablecoin.
“The old chain will be called Terra Classic (LUNC), and the new chain will be called Terra (LUNA). The chain upgrade will commence a few hours after the Launch snapshot.”
The new Luna will be distributed to previous holders of Luna and UST in an airdrop.
Investors who had over 10,000 Luna tokens will first receive 30 per cent of their tokens, with the remaining 70 per cent being distributed over the next two years.
This is being done to stop them from being sold off straight away.
Investors who held over one million Luna tokens will have to wait a year to receive any tokens, followed by a further four to regain all of them.
All decentralised applications and assets built on the old Terra blockchain will need to migrate to the new one.
When will Luna 2.0 launch?
Luna 2.0 was due to launch on May 27, 2022.
However, Terraform Labs announced just hours before the expected launch that they had to delay by 24 hours.
It will launch “on or around May 28, 2022, at 06:00:00 GMT”, according to the developers.
Where can I buy Luna 2.0?
Cryptocurrency exchanges who have confirmed they will be listing Luna 2.0 include
Binance, Huobi, Critfinex, Kraken, FTX, Gate.io, OKX, Bitget, Kucoin, Lbank, Lemoncash, HitBTCitMart, WhiteBIT, BKEX and MEXC Global.
Binance said it’s “working closely with the Terra team” to give impacted Binance users the “best possible treatment”.