It is no longer news that Terra LUNA lost 100% of its value. The coin dropped to $0.0001322 on May 27. This is the day that Terra 2.0 was scheduled to be launched. The most recent update says that the launch has been moved to May 28.
What chances does LUNA have for survival even after the launch of Terra 2.0? What are the views of the community about the chances of Terra 2.0?
Fork Without Community Acceptance
According to a comment by X-Ray, a user on Bitcointalk, the main challenge facing Terra 2.o is trust. He said that with the collapse of the Terra blockchain, the main issue that investors face is dwindling confidence in Terra. He highlighted that the proposed Terra fork did not gain the acceptance of the community. He noted that unlike many forks in the crypto space, Terra 2.0 has not had a remarkable impact on the price of LUNA.
“People are losing their hope and so many legal actions will be facing [Do] Kwon for his arrogant behavior and mistakes. This will be the end for Luna,” he said.
Money is All About Trust
South Park, an investor, in his view, said that as long as trust has been affected, it may be difficult for people to put more money in the future. He said that the support that LUNA is getting at the moment is to enable people to recover part of their losses.
According to Park,
“At the end, everything comes down to trust, once a form of money does not have the trust of the community, then it does not matter what kind of promises the developers make, they will never recover that trust. [The] project will collapse sooner or later,”
Widespread Institutional Support
Another LUNA investor, Ultrloa, said that LUNA would make a comeback. Their reason for optimism is the support that Terra enjoys among institutional investors. This, according to him, would give the new Terra the leverage to recover.
He said that,
“There are many institutions backing its revival, so a … bounce back again is [possible], but also you should remember that price recovery takes time and [the coin] may experience pump and dump from its existing investors since many are afraid that something bad might happen again”
This is also the view of Rugrats, in their comment, they wrote:
“Although Luna’s proposal for a new fork did not receive much support from the community, Do Kwon persisted in implementing it. I think people should stop hoping and believing in Do Kwon.”
The UST Connection To LUNA Crash
If Terra hadn’t created an algorithmic coin, the TerraUSD (UST), LUNA wouldn’t have encountered a problem. The LUNA crisis originated from UST loss of its dollar peg. The quest to save UST actually resulted in the crash of LUNA. In the Terra recovery plan, the new LUNA will not be associated with the stablecoin.
A community member, Adaseb, said that Terra may have lost its traction as a top coin. He added that recovery may not be forthcoming soon.
“Most likely it won’t be a top 10 coin anytime soon. Especially after all that happened. However, in a few years it might gain traction again. So it might be a low risk high reward situation.”
Terra Classic, Just Like Ethereum Classic
Some commentaries from community members likened the Terra debacle to what happened with the Ethereum blockchain. Great Arkansas said that the original blockchain will likely be abandoned, since most of the original developers will likely migrate to the new chain.
“As Do Kwon and Terra team announced, they won’t bind new LUNA with UST. I think both LUNA and LUNA Classic will not relate to UST but because the core team moves to new LUNA, the future of LUNA Classic is very gloomy.” – Tbct_mt2
Effect of The Fork On Token Prices
Another investor, JeffBrad12, said that the effects of the fork will not be different from what other crypto projects have experienced in the past. Brad said that the old blockchain will have reduced activity.
“So many votes have been cast by various parties and it seems the holders are still wanting to use the old Luna instead of the new Luna. I’m sure that holders will never stop using the old Luna. The price of the new Luna will be even deeper than the old Luna before the attack. We have so many fork coins in the market and the history of these fork coins can be tracked easily especially for the price performance. ”
Killing UST To Make LUNA Live
Another investor, Bitkanu said.
“I really doubtful that UST gonna exists after fork taking place other than it becoming the new shitcoin, after all UST needs trust from the community and it has lost plenty of that. The market of cryptocurrencies isn’t lacking any similar coin, instead there are so many that we might get confused choosing ones. The well being of LUNA v2 itself is still unclear, so I doubt that they gonna take care of UST”
The Terra Proposal 1623 wants to disconnect the platform’s native tokens from its existing stablecoin (UST). The Terra team seems to have realized that its stablecoin was a mistake. The proposal points to the suspicion that the stablecoin is defective. The team is now working to develop its new LUNA away from UST. This is why the past existing currencies have been renamed LUNA Classic, while the LUNA 2.0 will become LUNA. In a way, less emphasis, if any is placed on the revival of the stablecoin. What’s obvious is that UST may have to die for LUNA to live.