Cryptocurrency markets are selling off sharply after the collapse of the controversial blockchain project Terra.
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A new version of the collapsed cryptocurrency luna is already live on the big exchanges – and it started badly.
Last week, supporters of the Terra blockchain project voted to revive the moon, but not terraUSD, the so-called “stable coin” that sank below its planned dollar target, causing panic in the crypto market.
TerraUSD, or UST, is what is known as an algorithmically stable coin. He relied on a code and a sister token, luna, to maintain a value of $ 1. But as digital currency prices plummeted, investors fled Stablecoin by sending UST to collapse – and toppled Luna with it.
In its heyday, the old moon – now known as the “classic moon” – had a turnover of more than $ 40 billion.
Now luna has a new iteration that investors call Terra 2.0. It is already traded on exchanges, including Bybit, Kucoin and Huobi. Binance, the world’s largest cryptocurrency exchange, says it will announce the moon on Tuesday.
It didn’t go well.
After hitting a high of $ 19.53 on Saturday, luna fell to $ 4.39 just hours later, according to CoinMarketCap. It has since settled at around $ 5.90.
Analysts are deeply skeptical about the chances of Terra’s revived blockchain succeeding. It will have to compete with many other so-called Layer 1 networks, the infrastructure that underpins cryptocurrencies such as ethereum, solana and cardano.
Terra distributes token for the moon through what is called “airdrop”. Most will go to those who held Luna Classic and UST before their collapse, in an attempt to compensate investors.
But many disaster-stricken investors are unlikely to trust Terra a second time, experts say. Vijay Ayyar, head of the international department at the Luno cryptocurrency exchange, said there had been a “huge loss of confidence” in the project.