Terra’s new Luna token re-launch saw a weak start and failed to impress investors who got the new tokens after last month’s collapse of the cryptos tied to the failed Terra blockchain network.
Notably, the original Terra Chain has now been rebranded as Terra Classic and Terra has relaunched as Terra 2.0 as the team behind the failed stablecoin TerraUSD voted unanimously to abandon the token favoring the creation of a new blockchain and digital asset several weeks after the crypto collapsed.
The original blockchain was divided and referred to as Terra Classic, while Luna, which dropped to almost zero in May, was renamed Luna Classic with the ticker LUNC. This new Terra blockchain does not consist of a stablecoin. The average price of the Luna 2.0 token has remained below $11 in the past week since they got distributed by Terra, based on data compiled by the Kaiko tracker.
While there is not a widely recognized data point to determine the market value for Luna 2.0, a simple estimate by CoinMarketCap puts the cumulative value at nearly $1.37 billion. This figure is based on 210 million new Luna tokens that are in circulation, using amounts that are claimed by those who run the Terra project, according to Bloomberg.
Thomas Dunleavy, a senior analyst at cryptocurrency research firm Messari told Bloomberg, said:
“The airdrop was really poorly structured. It rewarded equity holders -LUNA holders, over savers or bondholders, Anchor depositors, or UST holders. Any network in crypto is built on trust, by not only users but also builders who commit their time and capital to grow the network.”
On May 6, Luna had a market value of nearly $27.8 billion before it crashed violently. UST was designed to maintain its dollar peg via both algorithms and trading incentives that involve Luna. Unlike a majority of the other major stablecoins that are backed by other assets, TerraUSD’s value was derived by complex algorithmic procedures, and integrated with another paired token known as Luna.