Looking to the starsThe Luna Foundation is wishing upon a star that their new plan to revive the network is taken seriously.
- Luna developers have put in place a 4 year plan to revive the ecosystem dubbed the ‘Terra Expedition’, with developer incentivization at the core of the proposal. If the community votes in favor, the incentivization program will be managed by an elected committee and have 20m LUNA tokens available for developers.
- It might not be all that easy to convince the market. While the incentive program is pretty attractive, developers would be taking a risk creating their platform on a network which has collapsed in the past. The tokens of both Luna Classic and the original Luna have been trending downwards the last few weeks despite getting a rush of attention in September.
- The worst is still not over for Luna’s founder, Do Kwon. Aside from his entire project collapsing in a multi-billion dollar disaster, South Korean authorities have nullified his passport and Interpol has issued a red notice for his arrest. If unsuccessful, the revival plan could end up just digging him a deeper hole.
Jorge Gardner / Unsplash
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Feel the burnIt’s been a good week for the brave few Luna Classic HODLers as Binance’s new burn mechanism goes down like a token on fire.
- LUNC rocketed by over 45% last week, with Binance’s token burning mechanism now in full swing. Binance now accounts for over half the total trading volume of the token, which is now sitting at a price of $0.00032. Though, when compared to its all time high of $100 in April, that figure becomes suddenly less impressive.
- So far, almost 7bn LUNC has been sent to its burn address, with frantic trading pushing the token into the top ten by volume over the weekend. However, with LUNC supply currently at almost 7tn, it’s got a ways to go before it reaches its former supply of 350m. In the last four months, only 0.1% of the total supply has been burned.
- The token may be making gains, but it's not looking good for its creator. Interpol has now issued a red notice for Do Kwon, with South Korean officials in the process of voiding his passport amid an investigation into the multi-billion dollar collapse of the Terra ecosystem. With great gains, comes great responsibility.
Binance lights a burning fire under LUNCLuna Classic hodlers are divided on whether Binance’s new burning mechanism is the best thing since sliced bread or the worst thing since banana on pizza. Yep, people actually do that.
Trouble in TerradiseDo Kwon has probably been repeating the mantra “at least it can’t get any worse” in his head for the last few months, but unfortunately for him, there still seems to be further to fall.
- South Korean authorities have issued an arrest warrant for Do Kown, the founder of the now-collapsed Terra blockchain. The arrest warrant included four other individuals, amongst them Terraform Labs’ head of research Nicolas Platias, for potential violations of the country’s capital markets laws. Safe to say the legal team won’t be getting much sleep this week.
- This is only the latest of the probes into the collapse. In July, prosecutors raided the home of Daniel Shin – one of the co-founders of Terraform Labs – for information on the ecosystem’s collapse. It doesn't serve as the best advert for the group’s newly launched LUNA token, though we’d be remiss to not mention that the token’s actually been doing pretty well lately – to many people’s surprise.
- The $40bn collapse was the first domino to fall in the crypto winter and caught much regulator attention, with the de-pegging of UST prompting South Korean regulators to begin revising wider stablecoin policies. In an interview discussing the possibility of going to jail, Do Kwon simply said “life is long”. We’re betting it feels longer behind bars...
Luna back from the dead?After the collapse of its ecosystem in May, LUNA’s back on a bull run. Everyone loves a comeback story, but the question is – is this one?
- LUNA, the new token of the Terra ecosystem, saw gains of 247% over the last two weeks despite losing almost 100% of its value when the ecosystem collapsed in May. Confusingly however, LUNA is not the original token of Terra – its creator Do Kwon carried out a fork of the original blockchain in an attempt to revitalize it.
- The new ticker’s not the only one enjoying price gainz tho. The original Terra token LUNC has also risen by around 205% over the last two weeks. Let’s not get carried away here – its all-time high of $119 in April this year should put its current price of $0.0004 into context.
- It's not entirely clear what’s causing the bullish sentiment. Some think it might have something to do with Terra’s recently launched ‘claim process’ for the LUNA airdrop for LUNC holders. While others are chalking it up to speculation and optimism for the ecosystem’s return. Hope springs eternal and all that.
Bruno Thethe / Unsplash
The mirror crack'd from side to sideMirror Protocol – a DeFi platform running on Terra – has fallen victim to an exploit that could see a lot more cash drained.
- A major discrepancy in a price oracle on Mirror Protocol has already cost the network up to $2m, with that figure having the potential to rise. The attacker(s) exploited the discrepancy by leveraging a mismatch of the old LUNC token with the new LUNA token posted by Terra validators, using it as collateral and withdrawing real assets through borrowing on the protocol.
- Put simply – a bug in the system meant Mirror thought LUNC was worth the same as LUNA, so $1k in LUNC became over $1m to play around with. As of writing, LUNA is trading at $8.70 in comparison to LUNC sitting at a meager $0.0001. So, yeah. Big discrepancy.
- The infamous FatMan whistleblower was back on Twitter to spill the tea, claiming the devs were “MIA” and the exploit would get further out of hand if there’s no intervention. Mirror previously lost $90m thanks to exploits – of which it failed to notice for seven months up until FatMan uncovered it last week. Yeesh. Nothing is going right for Terra these days it seems.
Now what?Just when Lunatics thought the nightmare was surely over, Terra ends up finding novel ways to dump on its fans.
- LUNA dropped 70% upon its launch on Friday. The refurbed token rose to $17 before quickly plummeting down to $5. Currently, it’s managed to calm down a notch, chilling at around $6. Luna Classic (LUNC)* didn’t impress either, dropping 8% upon the birth of its baby sister LUNA 2.0.
- Not all exchanges have even “unlocked” the token yet. If the price action so far is any indication, however, peeps trading on Binance prolly won’t be expecting much. The centralized exchange is planning to unlock users’ tokens May 31 at 05:30 UTC.
- So… what happens now? Well, more liquidity may be on the way, since only 21m new LUNA tokens were airdropped out of 1bn tokens available. The rest are set to be airdropped over time. By this point though, what folks’ reactions will be is anyone’s guess.
* - please note, the token displayed on this timeline is for Luna Classic, not Luna 2.0.
Kripto Kritik / Flickr
The Genesis of Terra 2.0One disastrous month and a last-ditch proposal later, Terra is apparently coming back from the dead.
- Terra 2.0 is set to launch at 6:00 UTC on May 28, with the airdrop of new LUNA tokens occurring at the same time. Already, notable centralized exchanges such as Binance, Huobi, and FTX have confirmed they’ll take on the resurrected token. However, major player Coinbase will not be taking part.
- Prop 1623 passed 65/35 on Thursday, pulling in a whopping 305m votes. A snapshot of the blockchain will now take place, which basically means Terra is gonna work out who was holding LUNA before the crash in order to distribute the new tokens fairly. Post-crash holders will also be given tokens, albeit in proportion with the supply – so not the 500k they bought for $20.
- What will Terra 2.0 look like? Terra has said projects on its 1.0 blockchain will be bridging over, while the supply on launch will be only around 120m. Due to the adjustment, LUNA whales may have to wait before getting their cut –100k+ LUNA wallets will initially be airdropped only 30% of their tokens, while wallets holding over 1m will have to wait a year.
Ganapathy Kumar / Unsplash
A fat whistleblowerThe drama of Terra continues, as a whistleblower going by the name “FatMan” spills the beans regarding an alleged shady conspiracy.
- An apparent whistleblower dubbed “FatMan” took to Twitter this week to implicate everyone and their moms in the downfall of Terra. Claiming to be linked with the Terra Research Forum, they allege that Terraform Labs (TFL) was cashing out millions of dollars each month from the LUNA supply and handing it to senior employees.
- FatMan tweeted statements given by the victims of LUNA’s downfall, outlining what $31bn being wiped off a crypto’s value overnight can do at a human level. While his intentions seem rooted in drawing attention to malpractice, there’s so far been no way to verify the validity of the fillin’ he’s been spillin’.
- Terra is now preparing for a hard fork to resurrect it from the dead, so the last thing it needs is a conspiracy piled on top of what is already a very tenuous level of trust it has with users. Many were quick to call Do Kwon a rug puller, but he has been fairly active since Terra’s disasterclass, and seems intent on sticking around to fix the mess.
Is that a pulse?Do Kwon applies the defibrillator to Terra, looking set to relaunch the blockchain under a new guise.
- Terra is set to be resurrected from the dead this week as its community vote showcases ample support for a hard fork that will convert its current network to ‘Terra Classic’. As of Monday morning, 60% of Terra’s community approved the amendment. If passed, the new chain could go live as soon as May 27.
- Terra Classic will aptly convert its tokens into Luna Classic (LUNC), while the new chain will airdrop LUNA and UST tokens to those on LUNA 2.0. The revived tokens will be airdropped to holders on its original blockchain, as well as key developers on its ecosystem.
- There’s already beef brewing, though. Firstly, Do Kwon has been amending the proposal midway through voting – altering the LUNA 2.0 token distributions for certain groups, while elsewhere there’s a video doing the rounds on Twitter, in which the Terra founder lets it slip about a “kill switch”. Talk about trust issues…
“Do one”, Do KwonTerra’s community hits back at CEO Do Kwon’s plans to revive its flatlining crypto LUNA, with many saying a hard fork ain’t gonna do nuttin.
- Do Kwon is proposing a hard fork to make… LUNA v2. Its current blockchain would live on as Terra Classic (LUNC), but a new and separate chain would airdrop LUNA tokens to those who HODL’d through the crash. Those who bought post-crash will be airdropped a proportionate amount – so forget about that 500k LUNA you picked up for $10.
- Terra’s community seem robustly against the hard fork. As of Wednesday morning, 92% have voted for a big fat no on a community poll. Do Kwon will need validators on his side if he wants to launch this new network, but we can’t say we’d be surprised if he doesn’t – he’s hardly Mr. Popular rn.
- Seems like you can’t hard fork your way out of a debacle. Binance CEO Changpeng Zhao chimed in to say forking to a date in the past won’t bring back Terra’s value. The token did rocket on May 14 thanks to the planned revival, shooting up 250% only to fall back down to near all-time lows.
A Terrable EndTerra lays its LUNA and UST tokens to rest, halting its blockchain somewhat fittingly on Friday the 13th.
- “Block 7607789”, called the crypto coroner on Thursday evening, as Terra halted its blockchain to mark the end of a gruesome four-day capitulation that saw investors lose up to 99.9% of their earnings. At the time of halting, LUNA was at $0.008, while the UST “stable” coin was at $0.19 after falling as low as $0.04.
- Validators tried to restart the blockchain’s heart earlier in the day, but efforts to stem the tide were too late. Terra’s crisis management clearly failed – its Bitcoin reserves came up short, while its decision to mint trillions of LUNA to absorb the shock of UST’s de-pegging was an act of martyrdom for its native token.
- Terra says it’s not ready for the casket just yet, though. Whenever (if ever) devs relaunch the blockchain, rumors suggest UST will be fully collateralized and LUNA will have new mechanisms behind it to prevent this cascading effect from ever playing out again. It’s a big if, but hold off on your Fs in the chat for now.
It’s actually going to zeroFor years, crypto going to zero was just a meme, a thing of the Bitconnect days – now LUNAtics are in turmoil as the token sits not even a nickel above that price.
- Terra’s collapse continues as LUNA drops to as low as $0.02, meaning it's now down 99.9% since the start of the week. Daaaamn. While its USD pairing was trending at $0.60, its pairings with stablecoins across exchanges sit barely above a dime. Meanwhile, Terra’s de-pegged stablecoin UST still cannot find parity, way down at $0.60.
- Is there any way out for Terra? CEO Do Kwon claims the re-pegging solution is to absorb the dumping UST supply with LUNA. Because of this, a mammoth amount of LUNA has been minted in the last few days, with its total supply now in the trillions. With that sort of supply, it’s going to be v hard for the token to even dream of its former prices.
- We could be witnessing the death of a major cryptocurrency, but can crypto weather this storm? Bitcoin hit a near 18 month low of $25.4k on Thursday morning as the shockwave of Terra’s collapse swept through the markets, with the overall market cap of crypto dropping 16% in under 36 hours. Forget the Winter of ‘18 – is this the Spring of ‘22?
Charlota Blunarova / Unsplash
The UST FalloutIn the face of Terra’s UST de-pegging nightmare this week, US Treasury Secretary Janet Yellen takes the chance to label stablecoins a “significant risk” that will have to be dealt with.
- Yellen made an example of UST’s recent collapse in a senate committee meeting to outline her stance on the “significant” and “rapidly growing” risks of stablecoins. The Treasury will release a comprehensive report on the sector, which is likely to stress that Congress should work towards stablecoin legislation by the end of 2022. Eeek.
- As of Wednesday morning, UST was down to a shocking $0.25 on multiple exchanges (stablecoins are obvs meant to stay at $1). It’s not clear how much capital in Bitcoin has been deployed by Terra so far to get UST back up to its dollar peg, but apart from a brief spell at $0.92 on Tuesday, it has yet to find any stability – and investors are fleeing fast.
- LUNA is now down 95% since the start of the week. Yep, you read that right. Bystanders are now wondering if it will drop below a dollar – a cruelly ironic but genuine possibility. The cascade of events that has led to the capitulation of LUNA is a reminder again of how new and volatile the crypto space still is. Stay safe out there, Snapsters.
Dark Side of the MoonThe moon has truly left Terra’s orbit, sending the ecosystem into disarray as stablecoin UST loses its grip on gravity.
- LUNA tanked an astronomical 52% on Monday to hit its lowest point since September last year as its stablecoin sister, UST, completely lost hold of its dollar peg and crashed to a low of $0.61 on Tuesday morning – its taking everyone down with it, sending Terra’s most dominant protocol, Anchor, down nearly 50% too.
- The Luna Foundation Guard (LFG) is here to do its job. The council is dipping into its reserves, unloading 28k BTC (over $750m) to buy up UST and get it back up to a dollar. This is kinda why LFG was created – UST actually depegged last year too, but there the stakes were much lower with only $2bn worth of UST in circulation vs the $18bn going around now.
- ICYMI, a stablecoin usually has to be stable, and Terra will now have to contend with people dumping UST on the way up to its dollar peg as exchanges like Binance halt withdrawals of the tokens. This is all bad news for LUNA too, which has been minted in large volumes to absorb the shock, deflating the price like a lead balloon.
Nicolas Thomas / Unsplash
The Depeg NightmareTerra’s stablecoin UST struggles to keep its dollar peg under the stress of the recent market volatility.
- UST dropped to a low of $0.985 on Saturday, and has yet to fully recover. While it’s kinda normal for stablecoins to occasionally lose their dollar peg briefly, UST has now spent three days unable to keep parity. The cause seems to be rooted in a large dump of UST on lending protocol Anchor and DeFi protocol Curve.
- There’s a conspiracy brewing, too – albeit on Twitter – but fans reckon this was a coordinated attack. By dumping UST to bring down the price of LUNA around 21% over the weekend, the alleged attacker(s) were able to short LUNA and score a big fat W against the market.
- Terra will need to dig into its reserves when the algorithm struggles under extreme conditions. Algorithmic stablecoins keep their peg by using smart contracts to artificially control supply and demand, but Terra has over $3bn saved up in Bitcoin in its reserves to cover the nightmare of its smart contracts… stop acting so smart.
LUNA lights some fireworksCrypto custody firm Fireblocks sees ‘crazy demand’ after opening Terra’s door to big-shot investors.
- Around $500m has been pumped into Terra since Fireblocks became the first platform to provide institutional-level access to dApps on Terra, letting big bizz poke its head into the DeFi space.
- Fireblocks CEO Michael Shaulov thinks Terra is a big deal, labeling it the “one of largest DeFi ecosystems in the world.” Terra is a diverse network, managing both its stablecoin UST and native token LUNA.
- Speaking of which, LUNA was down nearly 9% on Tuesday. But hey, the token has managed to outperform Bitcoin and the wider crypto market this year, and you know what they say: what goes up must come down.
Yiran Yang / Unsplash
Luna logs another milestoneYup, you guessed it – Terra adds a further $5m worth of Bitcoin to its reserves, and gets a new title for its trouble.
- It seems not a week passes without Terra topping up on Bitcoin. At the current prices, Terra’s 42.5k BTC is worth $1.7bn, meaning the crypto company is now breathing down the neck of Tesla’s stash of 43k BTC.
- It’s now more than halfway to its initial $3bn target of BTC reserves. Looking further ahead though, founder Do Kwon wants to hit $10bn worth of the OG crypto. This is mostly to back its stablecoin UST, taking a different approach to Tether’s USDT which is backed (allegedly) by fiat.
- LUNA rocketed 17% to mark a mega start to the week, going against the general bearish sentiment of the wider crypto market. Even better for Terra – its stablecoin overtook Binance’s BUSD to become the third-largest in terms of market cap. Do Kwon is a man on a mission.
Terraforming to the topTerra’s native token LUNA reaches new all-time highs after the Luna Foundation Guard (LFG) goes on a Bitcoin buying rampage.
🔍 Key points:
- LUNA rose 10% over the weekend as the token continues to soar up the market capitalization charts – putting the burners on to pass XRP into #8 on the list. The token has rocketed 131% since the Jan 31 low of $44, and is now entering price-discovery mode.
- Could the Bitcoin ecosystem be terraformed by LUNA? The price movement of the token comes during a week where LFG bought up more BTC, this time adding 5,000 to its pile that now totals 30.7k – worth an eye-watering $1.4bn. This puts LFG only 12k BTC behind Tesla in terms of holdings.
- What’s with the BTC lovin’? Terra co-founder Do Kwon says the rising reserve of Bitcoin is to help keep their stablecoin UST pegged at a dollar. Unlike Tether, UST isn’t backed by fiat, so it makes sense to buy up a crypto titan like Bitcoin, which is up around 3500% in the last five years.
LUNA stakes the moonWe know crypto made an impressive rally on Wednesday, but LUNA’s recent gains have been truly out of this world.
🔍 Key points:
- Its native LUNA token soared 16% on Wednesday to come only $2 away from the all-time high it reached in December. The crypto is enjoying its third consecutive week of gains, now up over 100% since February 21.
- It comes on the back of a rise in staking activity and an increase in De-Fi users on its platform, and the token has just become the most-staked cryptocurrency on the market – overtaking both Solana and Ethereum.
- Terra is also riding on the coattails of a boom in the NFT industry. Sales of non-fungible tokens jumped by an eye-watering 21,000% in 2021 to hit over $17bn from just $80m in 2020. We wonder what this year will hold…