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This TabStocks article considers the pros and cons of Terra Luna and how might D-day 27 May 2022 affect the future of Luna
How did the Luna Collapse happen?
Luna has lost over 99% of its value in a few days. UST, Terra’s algorithmic stablecoin is now at $0.12, losing its $1 peg.
Luna and UST were among the largest cryptocurrencies in the market, traded by millions in the world.
On 08 May 2022 Luna had had a supply of 343 million, this blew up to over 32.3 billion by the 12th.
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The Mass exit of UST triggered the ‘death spiral’ that eventually led to minting more Luna culminating to the collapse.
Will Luna rejuvenate or potentially go to the moon?
To understand the next trajectory from here, we need to logically analyse Luna, weighing its pros and cons.
Pros about Luna:
Large institutional backing
Venture capital funds and the largest crypto exchange, Binance are huge investors in Luna, working closely to revive it.
Luna’s forking revival plan
Voting has surpassed the required threshold and Luna is set to be rolled out into Luna classic and the new Luna (Aka Luna 2.0).
Strong buying activity
Buying activity from South Korea and recently Binance shows faith in Luna is pretty strong. Luna could go back up based solely on this.
27 May 2022 D-day
This is when the post attack snapshot will take place. The new rollout will be at this time and a potential swing is expected.
Founder Do kwon and Binance CEO have given the greenlight for this.
Big decentralization
The new Luna (Terra 2.0) is said to be the most decentralized large blockchain in crypto.
It will be a fully built out infrastructure and ecosystem, and 70% of the native asset will be airdropped.
New Luna projects
Many projects are already confirmed including Nebula, Sigma, Prism, etc. The synergies between these protocols create more value.
New Luna
The new Luna could potentially become a leading layer 1 blockchain.
Unlike Solana, Avalanche and other coins with centralization, Luna offers a decentralized system.
Experimentation and faith by the Lunatics
Crypto is evolving and promises to be the internet of money, and will face booms and busts cycles, just like the internet.
However, the internet was backed by faith in its technical capacity and so is Luna.
It is at the heart of Crypto and is definitely interesting to the masses.
Cons of Luna:
Viability of algorithmic stable
Stablecoins have lost favour in the public eye and regulators have condemned them.
Some will of course thrive but there exists a huge disparity at the moment.
Government regulation
Governments are not fans of crypto as it challenges their power.
They have cited the collapse of Luna as sufficient for a crackdown.
Luna will be dealing with a stack of lawsuits following the recent crisis.
Headstrong founder
Do kwon is equally adored and spited. He is known to be arrogant and the single cause of the crash.
Their success was indeed remarkable and their fate is in the hands of the market which is very psyched.
The majority always win and this is the case for Luna and crypto as a whole.
Conclusion about Luna
As to the eventual outcome, whether Luna can rise again or forever remained bashed down is a matter for the cryptocurrency and digital blockchain investing community to decide on.
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