Terra

Terra (LUNA) is a public blockchain protocol that emerged from Terra Classic. Due to limited liquidity, LUNA sell orders will not be accepted from 10:51 PM - 11:11 PM CT. Please submit your orders outside of this window.

On Thurs. May 25, Terraform Labs announced that the Terra community had approved the creation of a new blockchain, Luna 2.0. The creation of this new chain is a response to unprecedented volatility on the Luna 1.0 chain, which caused the price of the original LUNA and UST to collapse almost to zero. 

As part of the migration, the former asset LUNA will become Luna Classic, or LUNC. A portion of LUNA holders will be eligible to receive an airdrop of the new token (LUNA), per the terms outlined by Terraform Labs.

The new Terra blockchain will utilize the new LUNA, and will not include the UST stablecoin. 

On 9 May, after nearly 18 months of steadily holding its value against the US dollar, the so-called stablecoin TerraUSD (UST) became unpegged. The uncoupling triggered a cascade response that ultimately crashed UST and the Terra (LUNA).

TerraUSD (UST) is a stablecoin, which means it is a cryptocurrency pegged to a fiat currency. In this case, it is designed to be pegged to the US dollar. Stablecoins are intended to allow investors to hold crypto assets with less volatility, and trade a dollar equivalent without needing to cash out their positions. 

UST is considered an algorithmic stablecoin because instead of being backed by assets such as cash or cash equivalents, it is supported by on-chain code that facilitates a change in the supply and demand between UST and LUNA.

LUNA is the cryptocurrency that works in unison with UST in an effort to keep UST in 1:1 parity with the US dollar. One dollar of LUNA can always be converted at a 1:1 ratio to 1 UST. 

For example, if LUNA is trading at $10, then it can be redeemed for 10 UST, and 10 UST can be redeemed for 1 LUNA. If UST rises above its $1 peg to $1.01, then traders can swap 1 USD of LUNA for 1 UST. This trade burns 1 LUNA and mints 1 UST, which can then be sold for 1.01 USD. 

If UST rises to $1.02, then traders can sell for a 2 cent profit, and so on. 


In theory, increasing the supply of UST and lowering the supply of LUNA brings the price of UST back down until it reaches $1. Conversely, if UST drops below the $1 peg, then traders will be incentivized to buy 1 UST for 0.99 USD, which can then be swapped for 1 LUNA. 

This move burns UST and mints LUNA, sending UST higher towards the $1 peg.

UST lost its peg to the dollar starting on May 8th following large withdrawals of UST from Terra’s DeFi protocol Anchor. UST fell quickly, and struggled to regain its peg because the burning of UST and minting of LUNA couldn’t keep up. 

UST descended rapidly as the prolonged de-pegging led to uncertainty and a snowball effect of larger withdrawals. 


A significant share of circulating UST was locked on Anchor, a Terra-based lending and borrowing protocol that paid users 19.5% to stake UST. 

The LFG used up about $2.9 billion of its bitcoin reserves in an unsuccessful attempt to revive UST. 

WSJ 
Decrypt 
Bloomberg

*This content is for educational purposes and is not investment advice.

Bitcoin

Luna Classic (Former Terra)

The following article is adapted from The Block's newsletter, The Daily, which comes out on weekday afternoons.

The Daily: Analysts say full-blown bitcoin capitulation yet to come, Terraform Labs sues Jane Street over alleged insider trading, and more

The administrator for Terraform Labs, Todd Snyder, has filed a federal lawsuit against Wall Street firm Jane Street, alleging it used insider information to profit from the $40 billion collapse of Terrausd and Luna in May 2022.

Jane Street Accused of Using Insider Info to Profit From Terraform Labs' 2022 Implosion

Terraform Labs' bankruptcy administrator on Monday sued market making firm Jane Street for alleged insider trading during the 2022 Terra-Luna collapse, claiming the firm used a private group chat titled “Bryce's Secret” to obtain non-public information and front-run the $40 billion implosion. The 10-Minute Window The lawsuit centers on May 7, 2022, when Terraform quietly withdrew 150 million TerraUSD from Curve's 3pool without announcing it, the Wall Street Journal reported on Monday.

Remember The Luna Collapse In 2022? It Just Triggered A New Lawsuit

Jane Street has denied the allegations as a "desperate" and "baseless" attempt to extract money.

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The lawsuit alleges the trading firm positioned itself around undisclosed liquidity shifts as TerraUSD unraveled in 2022.

Terraform Estate Sues Jane Street Over Trades Tied to 2022 Crypto Market Collapse: WSJ

Terraform Labs' liquidation administrator sued Jane Street, accusing the firm of insider trading leading up to the collapse of Terra-Luna.

Terraform Labs sues Jane Street for alleged insider trading prior to Terra-Luna collapse: WSJ

Jump Trading faces a $4 billion lawsuit accusing the firm of secretly manipulating the Terra ecosystem and profiting from the collapse that erased roughly $40 billion in investor value. As reported by the Wall Street Journal and Bloomberg, the lawsuit was filed Dec.

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Jump is accused of unlawfully profiting from and contributing to the collapse of Terra, in a lawsuit seeking $4 billion in damages.

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The administrator winding down what remains of Terraform is suing Jump Trading, accusing it of contributing to its demise while profiting illegally.

Jump Trading sued for $4 billion in connection to Do Kwon's Terra Labs collapse: WSJ

A spokesperson for Jump reportedly called the lawsuit a 'desperate attempt' to shift blame and responsibility away from Terraform and Kwon.

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In South Korea, Do Kwon could potentially serve more than 30 years for his crimes, according to a local media report.

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The judge said the victim letters, which detailed the personal impact of the Terra collapse, were “impactful”—before sentencing Do Kwon to 15 years in prison.

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The sentencing brings a measure of justice, finally, for all of those impacted by the collapse of Terra and its UST stablecoin in 2022.

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Do Kwon, co-founder of Terraform Labs, has been sentenced to 15 years in a U.S. federal prison for his role in the 2022 collapse of terrausd (UST) and luna (LUNA now LUNC), with the possibility of serving the second half of his term in South Korea.

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Terraform Labs founder Do Kwon was sentenced to 15 years in prison, following the $40 billion collapse of UST and Luna in May 2022.

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Terraform Labs founder Do Kwon was sentenced for his role in the collapse of the Terra and Luna tokens on Thursday.

Terraform Labs founder Do Kwon sentenced to 15 years over $40 billion Terra-Luna collapse: Inner City Press

The Terraform Labs co-founder pleaded guilty to conspiracy and wire fraud in August.

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District Judge Paul Engelmeyer offered the Terraform Labs co-founder the chance to postpone his sentencing date, in light of hundreds of victim impact statements shared with the court in the past 24 hours.

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The upcoming sentencing comes after the South Korean entrepreneur pleaded guilty to defrauding investors in August.

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Do Kwon, the South Korean cryptocurrency entrepreneur behind two digital currencies that lost an estimated $40 billion in 2022, is set to be sentenced in New York federal court on Thursday for fraud and conspiracy.

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Judge asked whether Kwon might be freed abroad and asked for details on victims, time-served credit and unresolved charges ahead of sentencing.

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Your look at what's coming in the week starting Dec. 8.

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While Terraform Labs founder Do Kwon is slated for sentencing later this week and the Terra Classic v2.18 upgrade heads down the runway, both luna classic (LUNC) and luna (LUNA) have been enjoying a sharp climb over the past two weeks.

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The rally is driven by speculation that a final verdict could bring clarity to the project, as well as technical factors like token burns.

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