The Terra LUNA and Terra USD (UST) crash caused massive losses to investors. Terraform Labs and the Luna Foundation Guard have been under pressure to offer a way forward regarding the future of the network.
Do Kwon, the co-founder of Terraform Labs recently proposed creating a new chain dubbed Luna 2.0. The old chain will be renamed Luna Classic. The new Luna 2.0 will be unveiled on May 27.
Luna 2.0 launches on May 27
After UST depegged and LUNA crashed earlier this month, the community made several proposals to aid the network’s recovery. Proposal 1623 proposed by Do Kwon seeks to rename the existing Terra blockchain to Terra Classic, and the old LUNA token will now be known as Luna Classic (LUNC).
The new blockchain will be known as Luna, and it will be launched on May 27. The proposal to create this new chain passed with 65.5% votes being in support. The passed proposal is now the future of LUNA investors and those who still believe in the potential of Terra.
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Terraform Labs has said that Luna 2.0 will not share any features with the Luna network because it will be a genesis chain and not a fork. “The important distinction here is that a forked blockchain ‘shares all of its history with the original (chain)’, which Terra 2.0 will not,” the announcement said.
Terraform Labs also said that the decentralized apps (DApps) on the old blockchain will not pre-exist on the new chain. The DApps on the old chain that want to move to the new chain will have to migrate.
Investors have mixed reactions
Before the crash, Terra was one of the largest blockchains, while LUNA was a top ten cryptocurrency. Both LUNA and UST lost more than $39 billion in value following the crash, and investors that had stated UST were the most affected because they could not withdraw their tokens.
The Luna Foundation Guard had bought Bitcoin to maintain UST’s peg, but there have been questions about how the reserves were used. The CEO of Binance, Changpeng Zhao, had earlier said that the Terra team was slow to use the Bitcoin to maintain the peg.
The crypto community now has concerns about investing in Luna 2.0, given the scandal surrounding the collapse of the old Terra blockchain. One user raised doubts about the new chain’s long-term viability, asking why anyone would want to invest in the new blockchain.
Other users have also said that the recent action by Terra to launch a new chain, while issues with the old chain, are yet to be resolved. The investors who lost money from the collapse of UST are also yet to be reimbursed.
Several reports have said that law enforcement authorities are already involved in investigations against Do Kwon and the companies involved in the collapse of LUNA and UST.
Users have also asked if they can convert the old Luna Classic tokens into the new LUNA. Last week, Do Kwon had said he would work with leading exchanges to address this. There have been reports that the FTX exchange and Binance will support Luna 2.0. Do Kwon has also refuted claims that he reached out to five exchanges in South Korea, requesting them to list the new LUNA token.
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