Terra Classic blockchain has collapsed, initiating the reason for creating an entirely new chain known as Terra 2.0, which brought the token named LUNA 2.0 into existence.
LUNA 2.0 was launched, it began trading on ByBit at around $30, but crashed by about 80% a few hours later. At the time of writing, Terra (LUNA 2.0) is trading at $2.88, according to CoinMarketCap.
Read Also: Terra Team Explains Why Terra 2.0 Is Not a Fork but Entirely New Chain
It can be recalled that Do Kwon was warned by several crypto experts, such as Binance CEO Changpeng Zhao (CZ), that creating a new chain is never an option in getting the collapsed ecosystem back on track, but a massive burn of Terra Classic (LUNC) should rather be initiated.
Also, a number of Terra community members called for the burning of LUNC, but Kwon and his team of validators remained determined on creating Terra 2.0.
Experts Say LUNA 2.0 Has No Future
Bloomberg taped the opinions of four experts, who discussed the collapse of the Terra blockchain and the creation of Terra 2.0, concluding that the new chain and its native token, LUNA 2.0, have no future.
According to Mati Greenspan, the founder of Quantum Economics, LUNA 2.0 was never meant to grow. He said it was only created to make large investors who were heavily affected by the crash of UST and LUNA to recover a fraction of their losses. He said no factor is capable of aiding the growth of the new digital currency.
Mati Greenspan noted:
“Luna 2 was never meant to survive, it was simply a mechanism for some who were heavily invested to recoup some of their losses at the expense of new money coming in from the hype. I don’t see any reason for the price to go up ever.”
Another analyst at Messari, Kunal Goel, who spoke with Bloomberg said that it will be hard for LUNA 2.0 to survive because it was created during the bear market. He said the old LUNA derived its growth from TerraUSD (UST), but the new one does not have such support. Also, the legal issue is a bad signal:
“Terra 2.0 suffers from multiple problems. It has gone live in an unfavorable macro and crypto environment. Without an algorithmic stablecoin, it has no clear point of differentiation from other smart contract platforms. Finally, the regulatory overhang is a key concern in investors’ minds.”
Read Also: I’m Disappointed in Terra Team, Says CZ, As He Explains Why Binance Delists LUNA and UST
An analyst at Kaiko, Riyad Carey, is of the opinion that it will be difficult for LUNA 2.0 to gain footing in the market dominated by Ethereum, Solana, and Avalanche. He also said the lack of a burning mechanism is a negative factor for the growth of LUNA 2.0.
“Luna 2 will have a difficult time distinguishing itself in a crowded L1 ecosystem with large players like Avalanche and Solana and of course Ethereum. While the original Terra had a fairly robust ecosystem, much of that activity was centered around UST and aUST (UST earning yield in Anchor).
“Additionally, some of the price action was based around the burning of LUNA to create UST. So now Luna 2 doesn’t have this mechanism, will be facing inflation in the form of vesting/unlocks, and obviously has the baggage of being tied to the largest ever crypto collapse. So it will definitely be a tough path forward.”
Lastly, the founder and CEO of KoinBasket, Khaleelulla Baig stated that Terraform Labs and Do Kwon have lost credibility in the crypto industry, which is currently having a negative impact on the new token they created.
“Everyone wants to exit the new Luna as the founder Do Kwon has lost credibility among the community. Luna has no future. The founder didn’t build firewalls around the algo even when they had an opportunity to do so.
That’s why they have lost credibility. Building the new Luna within the existing community will not make any sense now. Smart money will move to fundamental coins from such risky coins.”
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