Terra

Terra (LUNA) is a public blockchain protocol that emerged from Terra Classic. Due to limited liquidity, LUNA sell orders will not be accepted from 10:51 PM - 11:11 PM CT. Please submit your orders outside of this window.

On Thurs. May 25, Terraform Labs announced that the Terra community had approved the creation of a new blockchain, Luna 2.0. The creation of this new chain is a response to unprecedented volatility on the Luna 1.0 chain, which caused the price of the original LUNA and UST to collapse almost to zero. 

As part of the migration, the former asset LUNA will become Luna Classic, or LUNC. A portion of LUNA holders will be eligible to receive an airdrop of the new token (LUNA), per the terms outlined by Terraform Labs.

The new Terra blockchain will utilize the new LUNA, and will not include the UST stablecoin. 

On 9 May, after nearly 18 months of steadily holding its value against the US dollar, the so-called stablecoin TerraUSD (UST) became unpegged. The uncoupling triggered a cascade response that ultimately crashed UST and the Terra (LUNA).

TerraUSD (UST) is a stablecoin, which means it is a cryptocurrency pegged to a fiat currency. In this case, it is designed to be pegged to the US dollar. Stablecoins are intended to allow investors to hold crypto assets with less volatility, and trade a dollar equivalent without needing to cash out their positions. 

UST is considered an algorithmic stablecoin because instead of being backed by assets such as cash or cash equivalents, it is supported by on-chain code that facilitates a change in the supply and demand between UST and LUNA.

LUNA is the cryptocurrency that works in unison with UST in an effort to keep UST in 1:1 parity with the US dollar. One dollar of LUNA can always be converted at a 1:1 ratio to 1 UST. 

For example, if LUNA is trading at $10, then it can be redeemed for 10 UST, and 10 UST can be redeemed for 1 LUNA. If UST rises above its $1 peg to $1.01, then traders can swap 1 USD of LUNA for 1 UST. This trade burns 1 LUNA and mints 1 UST, which can then be sold for 1.01 USD. 

If UST rises to $1.02, then traders can sell for a 2 cent profit, and so on. 


In theory, increasing the supply of UST and lowering the supply of LUNA brings the price of UST back down until it reaches $1. Conversely, if UST drops below the $1 peg, then traders will be incentivized to buy 1 UST for 0.99 USD, which can then be swapped for 1 LUNA. 

This move burns UST and mints LUNA, sending UST higher towards the $1 peg.

UST lost its peg to the dollar starting on May 8th following large withdrawals of UST from Terra’s DeFi protocol Anchor. UST fell quickly, and struggled to regain its peg because the burning of UST and minting of LUNA couldn’t keep up. 

UST descended rapidly as the prolonged de-pegging led to uncertainty and a snowball effect of larger withdrawals. 


A significant share of circulating UST was locked on Anchor, a Terra-based lending and borrowing protocol that paid users 19.5% to stake UST. 

The LFG used up about $2.9 billion of its bitcoin reserves in an unsuccessful attempt to revive UST. 

WSJ 
Decrypt 
Bloomberg

*This content is for educational purposes and is not investment advice.

Luna Classic (Former Terra)

Less than two weeks after being granted bail and released to house arrest, Bloomberg reports that Kwon is back in custody.

Terra Founder Do Kwon Back in Jail in Montenegro, Bail Revoked

Prosecution appealed a previous decision by a lower court in the country to let the disgraced founder go free while he faced trial.

Montenegro High Court Says No Bail for Terra's Do Kwon in Fake Passport Case: Bloomberg

The Terraform Labs co-founder remains in a Montenegro jail.

Do Kwon's bail revoked by Montenegro court: Bloomberg

A higher court in Montenegro on Wednesday scrapped bail of 800,000 euros ($880,640) previously granted to Do Kwon, a cryptocurrency entrepreneur charged in the U.S. with a multibillion-dollar fraud, and his ally pending a trial.

Montenegro court scraps bail for crypto entrepreneur Do Kwon

Embattled Terra (LUNA) founder Do Kwon is reportedly having his bail conditions appealed by Montenegrin prosecutors.

Terra (LUNA) Creator Do Kwon's Bail Conditions Appealed by Prosecutors: Report

Terraform Labs co-founder Do Kwon has been released from custody in Montenegro on bail.

Terra Luna Founder Do Kwon Out on Bail

Terraform founder Do Kwon will be released from jail but placed under police surveillance at a local residence, a Montenegrin court has decided. The trial against him and another Korean, on charges of travelling on false documents, opened on Thursday with both pleading not guilty.

Do Kwon to Be Released on €400,000 Bail, Pleads Not Guilty in Montenegro

Troubled Terra (LUNA) founder Do Kwon is being placed under house arrest in Montenegro after posting bail.

Embattled Terra (LUNA) Founder Do Kwon Placed Under House Arrest in Montenegro After Posting $435,000 Bail

A court in Montenegro agreed on Friday to release Do Kwon, a cryptocurrency entrepreneur charged in the U.S. with a multibillion-dollar fraud, on bail of 400,000 euros ($440,320), pending a trial on local charges.

Montenegro court releases crypto entrepreneur Do Kwon on bail

The Basic Court in Montenegro has agreed to a $436,000 bail for Terraform Labs' co-founder and CEO Do Kwon.

Terraform CEO Do Kwon to Be Released on Bail in Montenegro

Terraform Labs (CRYPTO: LUNA) co-founder Do Kwon and former CFO Han Chong-joon have been granted conditional release by a Montenegrin court after they each posted bail of 400,000 euros (U.S.$436,000). The duo were detained in March at Podgorica Airport, accused of attempting to exit the country using counterfeit travel documents.

Terraform Labs Founder And CFO Both Set For Release On $436K Bail

Bail conditions restrict Kwon from leaving his apartment in the country as the trial continues.

Do Kwon Set To Be Released on Bail in Montenegro Travel Document Forgery Case

Terraform Labs co-founder Do Kwon is reportedly set to be freed from jail pending trial after a court in Montenegro accepted a €400,000 bail.

Do Kwon set to be released after Montenegro court accepts $436,000 bail: local press

Do Kwon, the former CEO and co-founder of Terraform Labs, is facing legal troubles in both South Korea and the U.S. for his involvement in the Terra Luna blockchain project.

$176 Million of Former Terraform Labs CEO Do Kwon's Assets Frozen

Attorneys representing Terraform Labs (CRYPTO: LUNA) founder Do Kwon have suggested supervised bail as an alternative to detention while he faces charges in Montenegro for attempting to travel using counterfeit documents. Kwon and Terra executive Han Chang-joon were arrested in March by Montenegrin authorities, who subsequently charged them with document forgery.

Quest For Release: Terraform Labs Founder Fights For Freedom With Massive Bail Offer

Montenegrin authorities arrested the Terra founder in March for allegedly attempting to travel with fake documents.

Do Kwon's Attorneys Propose $437K Bail, Deny Falsified Travel Documents Charges in Montenegro

According to a local report, South Korean prosecutors have been given the green light by the Criminal Division of the Seoul Southern District Court to seize assets owned by Do Kwon, the co-founder and former CEO of Terraform Labs. The report discloses that a total of 233.

Seoul Court Greenlights Seizure of Do Kwon's Assets Worth $176 Million

South Korean authorities are looking to extradite embattled Terra (LUNA) founder Do Kwon months after he was found in the Eastern European nation of Montenegro.

Prosecutors Seek To Extradite Embattled Terra Founder Do Kwon to South Korea: Report

South Korean prosecutors are pushing for him to face criminal charges in his home country, claiming it would be best for victims.

Terra's Do Kwon Caught in Jurisdictional Battle Between US and South Korea

In the wake of the recent legal action against ten associates of Terraform Labs, which included the co-founder Shin Hyun-seong, known to many as Daniel Shin, it appears that prosecutors from Seoul are convinced that Terraform Labs and co-founder Do Kwon are still in possession of a considerable sum of money, specifically 130 billion won

Seoul Prosecutors Believe Terra Co-Founder Do Kwon Still in Possession of $100 Million Held in Swiss Bank Account

Terraform Labs (TFL) and its co-founder Do Kwon have requested the dismissal of the charges brought against them by the U.S. Securities and Exchange Commission (SEC).

Terra (LUNA) Founder Do Kwon Asks Court To Dismiss SEC's Securities Fraud Charges

Recent local reports have brought to light that Shin Hyun-seong, also known as Daniel Shin, co-founder of Terraform Labs, has been indicted by the Seoul Southern District Prosecutors' Office on charges of fraud.

Report: Terraform Labs Co-Founder Indicted on Fraud Charges in South Korea

South Korean prosecutors on Tuesday indicted the co-founder of the blockchain platform Terraform Labs, Daniel Shin, for fraud and other charges, the Yonhap news agency reported.

South Korea prosecutors indict Terraform Labs co-founder - Yonhap

The Terraform Labs founder also called Terra's failed stablecoin a currency and said he wasn't given sufficient warning about alleged SEC violations.

Do Kwon Seeks To Dismiss SEC Charges as South Korea Rules LUNA Is Not a Security

Lawyers for Do Kwon, founder of the defunct crypto issuer Terraform Labs, have requested a U.S. court to dismiss charges brought against him by the SEC, citing lack of jurisdiction among other reasons, according to court filings from Friday. Kwon has been on the run since the collapse of his cryptocurrency enterprise in May 2022 and was recently arrested in Montenegro for attempting to travel with falsified documents.

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