The multibillion-dollar network Terra’s demise has sparked a wave of dread, anxiety, and doubt across the crypto market.
Last week, the price of LUNA plummeted below that of a penny stock, and its sister token, the UST stablecoin, which is also linked to the blockchain, also crashed. In April, LUNA reached an all-time high of $119 before losing nearly all of its value in the following weeks.
Over $50 billion in crypto value was lost in the LUNA and UST crashes, a phenomenon that startled the crypto space and grabbed the attention of outsiders, including regulators, who are now working to tighten restrictions around the market.
After days of displaying little to no effort in its performance following the price drop, LUNA is now experiencing tremendous price volatility. LUNA reached a high of $0.0002, indicating a 110 percent increase in value in just 24 hours, though prices have subsequently retraced.
However, Terraform Labs founder Do Kwon’s proposed plan to revitalize the crippled blockchain is considered to have revived some optimism around both coins, resulting in today’s price increase.
Kwon detailed his proposal for Terra’s rebirth in a Terra research forum. The blockchain will be forked to form a new chain, however the UST stablecoin will not be included in the new chain. Kwon’s plan also calls for the creation of 1 billion new LUNA coins, which will be handed to developers as well as Luna and UST holders before and after the crash.
Terra Classic and Luna Classic will be the names of the old blockchain and native network cryptocurrency, while Terra and Luna will be the names of the new chain and cryptocurrency.
Although the voting session is still open, the proposal has already exceeded the adoption threshold, and the fork is scheduled for May 27. Many investors have resumed buying and holding LUNA and UST in order to be included in the snapshot that will be taken in less than a week, however the proposal’s execution does not guarantee that investors would recuperate all crash-related losses.