LUNA 2.0 price drops 67% hours after its launch
In the hours following the launch of LUNA 2.0, the cryptocurrency suffered a significant price correction, plunging by over 67%. Read what the crash means for Terraform Labs future below.
The crash has investors wondering whether Terraform will be able to make its comeback.
Seems like the recovery path for Terraform Labs is going to be a rocky one. The company’s redemption plan after the downfall of its stablecoin TerraUSD (UST) and its native token Terra (LUNA) already suffered a major blow. Just hours after its launch, the LUNA 2.0 crypto went through a substantial price correction.
By the time of its press release, the value of the LUNA 2.0 token had dropped over 67%. According to CoinMarketCap data, it went from $17.8 from the launch price to $5.78. The plunge comes shortly after Terraform Labs was able to distribute the new LUNA 2.0 tokens. The new and improved token was airdropped last Saturday and its maximum circulating supply is capped at $1 billion.
LUNA 2.0 main features
As stated by Terraform Labs, the LUNA 2.0’s release is under the Terra 2.0 mainnet – Phoenix-1. In its official announcement, Terraform said that wallets, node services and explorers should follow the mainnet and go live at a later date. Furthermore, the LUNA 2.0 token has no relation with its first version. The new crypto is based on a genesis blockchain. It starts from block 0 and has no dApps on its initiation.
The LUNA 2.0 launch comes after some of the most well recognised crypto exchanges listed the token, allowing its investors to trade in the asset. Companies like Nexo, Bitrue, Kraken, Kucoin, Lbank, Bitget, By bit and Bitfinex all showed their support for Terraform.
Other than the exchanges, several of the most important crypto ecosystems also announced their commitment to assist in the resurrection of Terra’s projects. The number one name in the market, Binance, stated it would provide support and investments to projects cogitating a migration from the Terra system through the BNB Chain.
Still, the LUNA 2.0 price drop does not correspond with the general public’s interest in the token. In early May, the interest in “Luna 2.0” on Google Search had a score of 8. On May 15, it surged to 100.
LUNA 2.0’s launch was decided through a voting exercise by Terraform’s community members on May 25. The new token is part of Terraform Labs’ founder Do Kwon’s comeback plan after Terra investors lost billions of dollars worth of coins during Luna’s collapse.
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Do Kwon’s fraud allegations
With a big section of the crypto community blaming Kwon for Terra’s crash, the Terraform Labs’ founder has found himself as the main focus of the collapse. Not only that, but Kwon is currently facing fraud accusations over the Mirror Protocol as well.
After its breakdown, the LUNA crypto continued to take big losses. Its market capitalization dropped significantly below the $1 billion mark. However, the collapse generated interest around Terraform’s original token. The hype around the crash was also powered by a short-lived rise as investors injected more money.
Since the crash, many cryptocurrency expert companies have tried to determine what exactly went wrong with Terraform’s network. According to Nansen’s research team, the collapse in the network was most likely due to an attack by a single person.
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About the author / Aline Barbosa
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