Following the resounding collapse of the Terra Luna coins and the blockchain currency of the Terra Terra during May, the Du Kwan project is relaunching the coins. After the Luna banknote collapsed from $ 40 billion to zero value, the LUNC currency is now being launched, as well as a new stable dollar-linked currency. Investors who hold the old currencies will receive the new ones in Air Drop, which is a mechanism for distributing benefits to currency holders that exists in the world of crypto.
The LUNC will not serve as an algorithmic stabilizer for the Tara Project’s linked currencies. The new currencies will be traded on leading crypto exchanges like Binance and more. Recall that at the beginning of the month the currency-linked stable currency of the Terra project lost its linkage and plunged, when Terra Luna, which is not a stable currency, was supposed to be the “central bank” of the project and perform an algorithmic linkage in an increase and decrease of Luna supply. The mechanism did not work in the moment of truth, and when the market reached a state of sharp volatility and declines, the value of the Luna currency also collapsed accordingly.
Project Terra tried to prevent the collapse by selling the bitcoin reserves in its possession, but the move also failed to prevent the collapse and also put pressure on the currency market as a whole.
Investor confidence will need to be re-acquired
In the overall rehabilitation plan, Kwan details the conversion ratios of old coin holders to new ones, and he lists the reasons that justify the Tara project rehabilitation: “Tara’s ecosystem contains hundreds of developers working in broad areas from the world of finance to labor markets. More than a million users. In distress, but there is a recognition of the brand’s strength. “
It is important to note that Tara does not return the algorithmic linkage mechanism, which was the innovative thing in the field of stable currencies that the project brought with it. This means that the block will have to hold reserves in order to back up the linkage commitment, as well as regain investor confidence after the media collapse.
At the moment, investors do not seem to be particularly impressed by the relaunch, and the new Luna currency, which peaked at almost $ 20 last Saturday, collapsed to $ 4.39 in a matter of hours.