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Another profound dip? Terra 2.0 sinks by more than 70% days after launch

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30
May
  • The new Terra ecosystem token, LUNA, dropped over 76 percent in the hours following its May 28 launch. 
  • Investors have expressed a lack of faith in the fallen project, with some planning on dumping their airdrops.

Once again, Terra (LUNA) has undergone a major carnage, having plummeted over 70 percent since its Saturday re-launch. This time, it’s the investors’ point to a lack of faith in the “new era” Terra 2.0. Seemingly, these investors, have learned the hard way from the first collapse.

Following the rebirth proposal of Terra founder Do Kwon, the community launched a new blockchain on May 28. Phoenix-1 mainnet launched on a good note, with multiple airdrops, and with LUNA at $18.87. All holding old LUNA tokens, or LUNA classic (LUNC) were eligible for an airdrop. The same applied to holders of the old UST stablecoin (USTClassic, or USTC) and those of Anchor Protocol UST (aUST).

Terra 2.0 falls 76% as investors dump

However, just two days later, the token saw an over 66 percent price slash to trade at $6.28 at reporting time. At its lowest, LUNA traded at $4.39, having dropped over 76 percent on the same day it went live.

So far, many investors of the Terra ecosystem seem to lack a clear purpose for the new blockchain. Most on Twitter said they plan on liquidating whatever LUNA tokens they have to recover some of their losses. That would then mark the end of their interaction with Terra and its projects. Podcaster Luke Martin tweeted:

The only reason to buy $LUNA 2.0 is to qualify for the next airdrop of $LUNA 3.0 after it goes to zero like $LUNA 1.0.

Twitter user @0xWolff says he sees no “fundamental” in the new project.

Popular crypto influencer Lark Davis is another investor that has deemed the project hopeless:

Zero plans to buy $luna 2.0, but I will dump any airdrop if I get something on Binance.

Buy the dip or dump?

Starting May 31, Binance will initiate a multi-year airdrop of LUNA to eligible users. The exchange will also list the token in its Innovation Zone for trading LUNA/USDT and LUNA/BUSD pairs. This is an area dedicated to the trade of volatile and high-risk assets.

According to holder @lurkaroundfind, LUNA’s bloodshed will only worsen following the Binance airdrop. However, different from the others, he has plans to buy the token once it begins recuperating. He also noted that by Tuesday, Binance will have “15.7MM liquid LUNA.” Holders of UST via Anchor protocol plan on cashing out since they see no value in the ecosystem, he added.

Of note, Kwon was the founder of another stablecoin project which also crashed in 2018. Terra is now the new case in point when referencing sunken crypto projects.  It now remains to be seen whether Kwon’s latest efforts will be in vain.

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