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.

Luna Classic (Former Terra)

Terra/Luna creator Do Kwon pleaded guilty to one charge of conspiring to commit fraud and one charge of wire fraud on Tuesday, following an earlier not guilty plea and a very lengthy extradition process.

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Terraform Labs co-founder Do Kwon plans to plead guilty to U.S. conspiracy and wire fraud charges tied to the $40 billion collapse of his cryptocurrency projects, a judge confirmed Tuesday.

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Do Kwon, the South Korean cryptocurrency entrepreneur facing U.S. fraud charges over two digital currencies that lost an estimated $40 billion in 2022, is expected to enter a guilty plea, court records showed on Monday.

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Do Kwon, the mastermind behind the collapsed Terra crypto project, is expected to plead guilty on Tuesday, court docs show.

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Terraforn Labs co-founder Do Kwon plans to plead guilty years after U.S. prosecutors charged him with fraud and money laundering.

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Prosecutors said they have no plans to alter the charges against Do Kwon despite a policy shift memo from deputy attorney general.

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Galaxy Digital, founded by Michael Novogratz, has agreed to pay $200 million in penalties to resolve allegations that it violated New York laws by promoting the cryptocurrency LUNA without disclosing its financial interests.

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Terraform Labs will launch a Crypto Loss Claims Portal on March 31, 2025, enabling investors impacted by the 2022 collapse of terrausd (UST) and associated cryptocurrencies to seek compensation.

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Managed by administrators at New York-based Kroll, the portal will open on Monday, March 31 and close on April 30.

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The crypto investment giant Galaxy Digital has settled with the New York State Attorney General for $200 million after facing allegations that it illegally propped up the ill-fated LUNA token.

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Creditors must file claims by April 30, 2025, to seek potential recovery.

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The New York Attorney General and Galaxy Digital have agreed to a settlement over the firm's handling of LUNA before its 2022 collapse.

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Terraform Labs' crypto claims portal will open on March 31 nearly three after Terra's $40 billion ecosystem collapsed.

News for Terra Crypto (LUNA)