LUNA 2.0 down 78% from launch as investors dump airdropped tokens

Key Takeaways:

  • Terra's LUNA 2.0 token is off to a bad start, jeopardizing its revival plans for the token
  • LUNA prices are down 78% from May 28's high of $30
Terra's revival plan for LUNA seems to be in jeopardy after the new token is off to a bad start. Image from Freepik and Cryptologos
Terra’s revival plan for LUNA seems to be in jeopardy after the new token is off to a bad start. Image from Freepik and Cryptologos

NEW DELHI (CoinChapter.com) — Do Kwon’s revival plans for Terra seem to be in jeopardy after the LUNA’s new iteration, which investors are calling LUNA 2.0 or Terra 2.0, crashed 78% from its May 28 high ($30) to reach an intraday low of $6.6 on Jun 1.

Both tokens of the Terra ecosystem dropped to zero early in May, paving the way for heavy bloodshed in the crypto market that saw Bitcoin prices drop below $29,000. Last week, Terra supporters voted to revive LUNA but not TerraUSD, the project’s algorithmic stablecoin.

LUNA 2.0 is already trading on various exchanges including Bybit, Kucoin and Huobi, and Binance. However, the token’s launch has not gone well. Luna 2.0 launched on May 28 and reached an intraday high of $30 within hours, as per data from Bybit.

LUNA 2.0 prices fell within days of its launch. Source: Bybit.com
LUNA 2.0 prices fell within days of its launch. Source: Bybit.com

Terra is distributing the LUNA 2.0 tokens through airdrops for users who previously held the old tokens or UST before the ecosystem’s collapse. However, there seems to be a lack of clarity regarding how Terra plans to collateralize its new tokens.

Also Read: Is LUNA recovery possible? – Here’s how Terra is attempting a comeback.

Furthermore, market participants believe there is a lack of transparency around the reserves that Terra needs to back its revamped token. Identity management platform EarthID’s vice president Sharat Chandra told Economic Times that changing the name of the token would not help restore investors’ faith.

Hard forking the chain without addressing the underlying algorithm that failed to keep the peg was wishful thinking for the founder and community members who voted for Terra2.0

Chandra said

LUNA 2.0 Investors Dumping The Token

Meanwhile, it seems investors lack trust in the “revived” Terra ecosystem. The recent fall in LUNA 2.0 prices further eroded investor confidence. Traders are being cautious, and investors’ disillusionment might lead LUNA 2.0 down the path of its predecessor.

Investors have already started selling. Twitter is awash with posts from investors who are either mocking the Terra revival or advising others to sell their LUNA 2.0 tokens.

Another trader, who goes by the pseudonym Devchart, shared Luke Martin’s sentiment regarding LUNA 2.0. According to his post, LUNA 2.0 is the same product in different packaging.

Also Read: Terra’s Mirror Protocol compromised again but “LUNA 2” soars 100% anyway.

Some Twitter users also compared Terra founder Do Kwon to Bernie Madoff, an American financier and fraudster, who ran the largest Ponzi scheme in history. Another user claimed Anchor Protocol investors would rush to liquidate as they have lost interest in the Terra ecosystem.

On May 29, investor Lark Davis promised his followers he would dump any airdropped LUNA 2.0 tokens. Moreover, he also shared he had zero plans to buy the revived Luna tokens.

It seems he kept his promise.

At the time of writing, LUNA was trading at $7.4, down 16.22% on the day.

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Terra, LUNA 2.0 down 78% from launch as investors dump airdropped tokens

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