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On May 28, 2022, after numerous scandals around the Terra crypto project, the launch of the second version of its protocol should take place. The editors of BeInCrypto decided to figure out what the appearance of Terra 2.0 means for the market, and who benefits from it
What happened and why the Market needs Terra 2.0
In early May 2022, the algorithmic stablecoin of the ecosystem of the Terra crypto project – TerraUSD (UST) lost its peg to the underlying asset – the US dollar. As a result, the rate of the “stablecoin” fell to $ 0. Following the UST, terra’s native token, the LUNA cryptocurrency, went to the bottom. Against the background of the depreciation of coins, their investors suffered losses.
Luna and TerraUSD charts. Source: CoinMarketCap
What exactly caused the loss of TerraUSD peg to the US dollar is not known exactly. Members of the crypto community suggest that the UST lost parity with the national currency of America against the background of the withdrawal of a large amount of funds from the Anchor protocol, in which it was possible to profitably steak a stablecoin. Other possible causes include a dump by BlackRock and Citadel.
The developers of Terra tried to restore the course of TerraUSD with the help of additional funding. Unfortunately for the project team, the scheme did not yield results.
Against the background of the failure of attempts to revive the platform, the developers decided to create a version of Terra 2.0. The official microblog of the project says that the restart of the platform will take place on May 28, 2022 at 06:00 AM UTC (at 9 am Moscow time). The first version of Terra, at the same time, the developers plan, by analogy with Ethereum and Ethereum Classic, to rename Terra Classic.
Terra microblog screenshot
Against the background of the launch of Terra 2.0, according to the developers, users will again have access to the tools of the project’s ecosystem, including a blockchain explorer and a crypto wallet. Also, the developers promise to migrate to Terra 2.0 many favorite users of decentralized applications. Surveys on the network show that participants in the crypto industry are waiting for the second version of the project.
Screenshot of a poll from Twitter
It is noteworthy that a number of large crypto-exchanges supported the plans of the Terra team to revive the project.
The new code of the platform, the security of which was checked by the SCV team, appeared on GitHUB.
A few words about airdrop Terra
Against the background of the launch of the second version of the Terra network, the organizers will distribute tokens (airdrop). The new coins will be received by users whose wallets included LUNA and UST before the loss of stablecoin parity with the US dollar, as well as investors who bought digital assets amid the destruction of the Terra ecosystem.
To compile lists of investors to whom the cryptocurrency will be transferred, developers use snapshots (screenshots of the position of the network, which reflect information about its current state) dated May 7 and 27, 2022. The developers plan to distribute coins on the first block of Terra 2.0. Its generation is scheduled for 06:00 GMT (09:00 Moscow time) on May 28, 2022.
Conditions of the Terra Airdrop. Source: Project Blog
The developers tried to explain the scheme of the airdrop by example. Let’s say Alice kept LUNA on deposit in the Anchor protocol. Here’s what her wallet looked like in the period before the Attack on TerraUSD and after:
“Alice will receive 30% of its airdrop during the generation of the first block. After that, the balances of her share will be linearly distributed to the same wallet address for two years with a break of 6 months, “the project’s blog says.
Will Terra 2.0 survive?
The editors of BeInCrypto spoke with experts about the prospects of Terra 2.0. Our interlocutors believe that the restart will not help developers revive the project. Experts explained their point of view by the fact that Terra lost the most important thing – the trust of its users.
At the same time, market participants believe that the incident with TerraUSD does not put an end to the entire industry of algorithmic stablecoins. According to our interlocutors, the market needs such assets, which means that the scandal around Terra may soon subside.
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