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.

People Power lawmaker Yun Chang-Hyun alleges that various domestic exchanges saw the UST depeg as an opportunity for unscrupulous profiteering.

South Korea Lawmaker Calls for Enquiry Into Exchanges' Terra Activities

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Here's How To Prevent the Next Terra (LUNA) Collapse, According to Crypto Venture Capitalist

Amid Terra's collapse last week, Tether also briefly lost its peg. Now, it appears some investors have dropped the stablecoin for the competition.

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Terra community seems dead set against Do Kwon's fork proposal

Cosmos

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South Korea's financial authorities have reportedly embarked on an emergency assessment of domestic crypto exchanges.

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Bitcoin

The Luna Foundation Guard, the entity in charge of safeguarding the peg of UST, the stablecoin of the Terra ecosystem, has revealed how it used the available Bitcoin reserve before the recent debacle involving the Terra ecosystem. The organization sold part of the bitcoins owned directly, while another part was traded on different dates to […]

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To save the Earth, they'll have to blow up the Moon. The post How to Save Terra appeared first on Bitcoin Market Journal.

How to Save Terra

An op-ed article published in the state-backed Chinese publication Economic Daily, has suggested that the recent crash of the Terra blockchain's LUNA and the de-pegging of the UST stablecoin vindicate the Asian country's decision to ban crypto-related activities. In the article, the author names the interest rate hikes by the U.S. Federal Reserve and the […]

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Under a plan proposed by Do Kwon, the current chain would be renamed Terra Classic. The new chain would ditch the UST stablecoin.

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Do Kwon wants to fork the Terra blockchain as part of revival plan

Just recently, the product comparison platform finder․com polled 36 fintech specialists about the cryptocurrency terra (LUNA) before terrausd (UST) lost its parity with the U.S. dollar. According to the poll, Finder's experts predicted LUNA would be $143 before the end of the year. Currently, LUNA is worth far less than a U.S. penny and while […]

Finder's Poll Conducted Weeks Before Terra's Fallout Predicted LUNA Would Tap $143 This Year

Terraform Labs CEO Do Kwon is out with a new “Revival Plan” to save Terra ecosystem in the wake of last week's stablecoin meltdown.

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Binance's Changpeng Zhao (CZ) has said the exchange supports the proposal to compensate retail LUNA users ahead of larger investors. He also said the LUNA tokens received by Binance in exchange for a $3 million investment in Terra have not been sold or moved. Binance's LUNA Tokens Not Sold After his exchange faced criticism for […]

CZ Says Binance Supports Proposal to Compensate LUNA Retail Users First

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Terra (LUNA) Is a Case of Marketing and Memes Gone Wrong, According to FTX CEO Sam Bankman-Fried

Venus Protocol resumed its operations after the LUNA collapse.

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The Luna Foundation revealed its reserve assets and Bitcoin has almost disappeared from its balance sheet.

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Terra's CEO Do Kwon broke his silence with a new revival plan for the ecosystem, but Vitalik Buterin and Changpeng Zhao doubt it will work.

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Fantom

Polygon

Other blockchains are advertising themselves to developers closing their shops on Terra after its collapse. The post Polygon, Juno and Fantom blockchains try to lure Terra's projects appeared first on The Block.

Polygon, Juno and Fantom blockchains try to lure Terra's projects

The Luna Foundation Guard has revealed that it currently has only 313 BTC left in its reserves.

LFG Unpacks Bitcoin Activity During LUNA, UST Collapse

The non-profit organization said only 313 BTC are now left on the bitcoin reserves for Terra's UST stablecoin.

Luna Foundation Sold 80,000 Bitcoin Amid UST Crash

Even though Binance lost nearly all of its initial investment, it still turned a profit from its staking yield. The post Binance's LUNA investment, which peaked at $1.6 billion, now worth just $3,000 appeared first on The Block.

Binance's LUNA investment, which peaked at $1.6 billion, now worth just $3,000

The Luna Foundation Guard (LFG), official stewards of Terra's bitcoin reserves, released a statement on Monday documenting how they dispersed millions of dollars worth of crypto in their failed attempt to maintain the peg of stablecoin terraUSD (UST).

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