Luna developers vote to create new blockchain, bypassing the failed UST
The developers are abandoning the failed UST and LUNA tokens in favour of a new token, and are forking the existing blockchain to create a new one without an algorithmic stablecoin.
In a blog post, Terra developers who were behind the failed algorithmic stablecoin TerraUSD (UST) and its partnered coin Terra (LUNA), announced that they are going to fork the blockchain and abandon the two tokens. Instead, there is going to be a single new token that will be distributed to all holders of the old coins.
Before the crash on May 9, UST was the tenth biggest cryptocurrency by market capitalisation, with a value of over $18.5 billion. Today, that is closer to $1 billion after UST lost its 1-1 peg with the US dollar.
Under the new blockchain, the existing coins will be renamed Terra Classic (LUNC) and TerraUSD Classic (USTC). The new coin will be called Terra (LUNA), and there will be no new stablecoin replacement. Instead, all holders of both older coins will be compensated with new LUNA tokens over time, depending on their holding pre- and post- market crash.
The blockchain seems to be pivoting to a complete focus on smart contracts, abandoning their earlier dreams of maintaining a stablecoin peg. According to the blog post, Terra considers itself the second largest smart contract chain in the ecosystem after Ethereum, and believes it can rebuild its success with the new value proposition focus.
Since the crash, the Terra developers have been under intense scrutiny. Terraform Labs CEO Do Kwon is already under investigation for tax evasion in South Korea, and it was reported yesterday that the Seoul Metropolitan Police have seized the Luna Guard Foundation's assets over fears of embezzlement.
However, despite these misgivings, Terra has announced that various exchanges including Binance and Bybit will help launch the new LUNA coin in the near future.
Edited by Anju Narayanan