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.

At fintech conferences, payment firms, lenders, and neobanks often take center stage over their counterparts in crypto. But at Finance Foward in Hamburg last week the fallout from the de-pegging of UST hung in the air.  The post At Finance Forward, fintech couldn't avoid talking about Terra appeared first on The Block.

At Finance Forward, fintech couldn't avoid talking about Terra

The opposition by CME to FTX's proposal for margin disintermediation continues to play out in the public eye.  The post At CFTC panel, CME exec slams FTX proposal by drawing comparison to Terra's collapse appeared first on The Block.

At CFTC panel, CME exec slams FTX proposal by drawing comparison to Terra's collapse

The proposal's approval means that the new network is scheduled to launch on Friday, with a fresh round of LUNA tokens airdropped to existing investors.

Terra's Blockchain to Be Revived, But Some Investors Are Furious with Do Kwon

The new Terra blockchain will be launched in the next couple of days and includes a new distribution of LUNA tokens.

Terra Community Approves Do Kwon's Plans to Revive Project

Decentralized finance (DeFi) project Lido Finance voted overwhelmingly against supporting the new Terra blockchain, with less than 5.5% voting in favor. The revival plan was approved by Terra's network validators today.

Terra's revival plan was approved by network validators earlier Wednesday.

The governance vote on Do Kwon's proposal to relaunch the Terra blockchain and create LUNA 2.0 tokens has passed. The post Do Kwon's plan to rebirth the Terra blockchain gets approved appeared first on The Block.

Do Kwon's plan to rebirth the Terra blockchain gets approved

Lido DAO

Lido Finance has decided not to support the new Terra blockchain when it launches, due to perceived risks. The post Lido Finance refuses to support Terra's new blockchain appeared first on The Block.

Lido Finance refuses to support Terra's new blockchain

Acting OCC Head Michael Hsu is doubling down on the bank regulator's careful approach to crypto, though he says he sees potential in crypto. The post OCC's Hsu reiterates “careful and cautious” approach after Terra collapse appeared first on The Block.

OCC's Hsu reiterates “careful and cautious” approach after Terra collapse

South Korean regulators are mulling plans for the crypto industry following Terra's collapse this month. The post Terra's ‘vortex of death' brings scrutiny from South Korean regulators appeared first on The Block.

Terra's ‘vortex of death' brings scrutiny from South Korean regulators

Also today, crypto dominates discussion at the World Economic Forum in Davos.

CoinMarketCap News, May 24: Terra is Being Rebuilt... But is Investing a Bad Idea?

South Korea's financial authorities are looking to introduce measures to hold crypto exchanges to greater scrutiny in the wake of Terra's collapse, according to a report by The Korea Times.

Around 280,000 South Koreans are believed to have been victims of the abrupt plunge in UST and Luna.

Cryptocurrency exchanges should be held legally accountable for violating anti-money laundering and investor protection rules, according to a Korean government official.

South Korean Crypto Exchanges to Face Closer Supervision Following Terra Collapse

Bitcoin

At the World Economic Forum in Davos, Kristalina Georgieva says all digital assets shouldn't be treated the same — as crypto "offers us all faster service, lower cost, and more inclusion."

IMF Boss Says Crypto World 'Important' Despite Terra's Collapse… But Has Choice Words on Bitcoin

India's central bank, the Reserve Bank of India (RBI), has warned about investing in the crypto market following the collapse of cryptocurrency terra (LUNA) and stablecoin terrausd (UST). “We have been cautioning against crypto and look at what has happened to the crypto market now,” said Governor Shaktikanta Das. RBI's Governor on Crypto Market and […]

India's Central Bank Governor Warns About Crypto After Collapse of Terra LUNA, UST

The South Korean police have reportedly launched an investigation into possible embezzlement involving an employee of Terraform Labs. To prevent fund transfers, the police have requested crypto exchanges to freeze the Luna Foundation Guard's accounts. Embezzlement Investigation and Asset Freeze The Seoul Metropolitan Police Agency's Cybercrime ​​Investigation Unit announced Monday that it has launched an […]

Korean Police Ask Crypto Exchanges to Freeze Luna Foundation Guard's Assets

After the LUNA and UST meltdown, many crypto investors have been curious about the project's rise in popularity and people wonder about the background of Terra's co-founder Do Kwon. Moreover, it is not commonly known that Terraform Labs was also founded by Daniel Shin, the founder of a payment firm called CHAI. After Shin left […]

The ‘Lunatic' Movement: A Look at Terra LUNA's Inception and the People That Helped Do Kwon Rise

Police in South Korea have reportedly asked multiple exchanges to freeze assets belonging to Luna Foundation Guard. The post Korean police seek freeze on Luna Foundation Guard assets: KBS appeared first on The Block.

Korean police seek freeze on Luna Foundation Guard assets: KBS

After Terra's historic collapse, many accused Do Kwon of foul play. He's stood his ground this week and won back some support.

This Week on Crypto Twitter: Terra Conspiracy Theories Swirl as All Eyes Turn to Do Kwon

Quick Take A major South Korean law firm, LKB & Partners, is suing Do Kwon and co-founder Daniel Shin on behalf of five investors. Other investors are also organizing online to launch their own lawsuits; we may end up seeing cases centered around whether TFL represented its products and the risks of investing accurately.

Lawsuits aimed at recouping UST/Luna losses test uncharted waters

Citadel Capital CEO Ken Griffin is arguing the collapse of Terra (LUNA) should serve as a wake-up call for regulators. In a new interview, Griffin says the Terra (LUNA) “catastrophe,” which also saw the de-pegging of the blockchain protocol's flagship stablecoin TerraUSD (UST), should motivate the authorities to come up with the necessary regulation, especially […] The post Citadel Capital CEO Ken Griffin Says Terra (LUNA) ‘Fiasco' Should Be a Wake-Up Call for Regulators appeared first on The Daily Hodl.

Citadel Capital CEO Ken Griffin Says Terra (LUNA) ‘Fiasco' Should Be a Wake-Up Call for Regulators

It took four years for Terraform labs to grow as big as it did, with key moments along the way.

Terra Crashed Spectacularly. Here's How It Launched.

Following the Terra blockchain fallout and the great UST de-pegging event, the Terra network ecosystem is now a wasteland of almost worthless tokens and protocols. While both UST and LUNA were top ten crypto market cap contenders, Terra's decentralized finance (defi) presence was second to Ethereum in terms of total value locked. Today, the remaining […]

Crypto's Barren Wasteland: A Look at What's Left of Terra's Defi and Token Ruins

Last week's stablecoin failures were the talk of the town, with UST biting the dust and USDT also briefly losing its dollar peg. Not DAI.

Why Maker's DAI Is Surviving Even After Collapse of Terra's Decentralized Stablecoin

The CEO of Terraform Labs is facing possible criminal charges in the wake of two leading cryptos collapsing earlier this month. In a new report, Yonhap News says that South Korean authorities are considering bringing Ponzi scheme charges against Do Kwon, the founder of Terra (LUNA) and algorithmic stable coin TerraUSD (UST), both of which […] The post Terra (LUNA) Founder Do Kwon Facing South Korea Investigation Over Claims of Ponzi Fraud: Report appeared first on The Daily Hodl.

Terra (LUNA) Founder Do Kwon Facing South Korea Investigation Over Claims of Ponzi Fraud: Report

Last week, Anchor saw more than $1 billion in liquidations, the largest liquidation event for a single DeFi protocol. The post Anchor saw $1 billion of liquidations during UST and Luna's death spiral appeared first on The Block.

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