New Terra project fails to make up for former coin holders’ losses
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Answer New Terra project fails to make up for former coin holders’ losses
Expectations of former LUNA and UST coin holders to recoup their losses have disappointed.
Even after Terra 2.0 was launched on May 28 as part of a recovery plan for the new “Terra” in a community-approved proposal, which also supported abandoning the original Terra blockchain after its collapse, and rebranding it to Terra Classic.
The new Terra blockchain does not support stablecoins, and it already has seven projects built and will be launched on it.
The LUNA 2.0 project got off to a shaky start, losing nearly 70% within 24 hours of launch.
Since then, the average price of the digital currency LUNA 2.0 has remained below $10.
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At press time, LUNA is trading at $5.2, down 26% in the last 24 hours, according to CoinMarketCap.
On May 6, the old LUNA traded at around $86 before the stablecoin TerraUSD (UST) lost its parity and correlation with the dollar.
Which means that earlier coin holders are far from getting their money back even after the distribution by the Terra team.
The crypto community is losing optimism about Terra:
While Terra seemed very optimistic about the success of this new network, few members of the crypto community are optimistic about it.
Felix Hartmann, Managing Partner of Hartmann Capital, commented on the newly launched Terra blockchain and said:
There is a big question mark.
For the project to be successful it will require a lot of rebuilding trust with investors and developers.
According to Hartmann, rebuilding Terra from the ashes is something to watch because it will likely start from the bottom up, but it will also require a lot of work on the part of the founders because they won’t have multi-billion dollar market valuations.
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Hartmann added:
It’s something to watch, but the real fruits – if ever – could take a year or two, certainly not this month.
The Terra ecosystem collapsed in May after the removal of Terra UST.
After a sharp price drop, the original LUNA project lost all its value completely, with billions of dollars in losses recorded.
Changpeng Zhao, CEO of Binance, revealed that the company lost nearly $1.6 billion of its investment in LUNA after the latter reached its peak.
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