Terra2.0 blockchain will go ahead with no clear plan for its failed stablecoin UST
May 26, 2022 10:36 AM
The TerraUSD developers community have proposed to give up the token in turn of creating a new blockchain and digital asset weeks after the original token imploded.
Unlike most other major stablecoins which are backed by other assets, TerraUSD's worth was derived by complicated algorithmic processes, associated to another paired token called Luna. Both tokens have lost near all of their worth since TerraUSD, known as UST, slipped below its 1:1 peg to the dollar earlier this month.
Under the recovery plan for the Terra ecosystem, developers will make a new Terra blockchain with a renewed Luna token.
The pioneer blockchain will be renamed Terra Classic, while the initial Luna token will be called Luna Classic.
Terra backers will distribute the substitute Luna token to Luna Classic and UST holders. In a tweet, Terra said that it would work with crypto exchanges Binance and Bybit to distribute the new asset to people who held Luna Classic and UST on exchanges.
"Our strength will constantly be in our community, and now is the most resounding sign yet of our resilience. We can’t wait to continue our work together building the future of money," Terra said in a tweet.
However, before its collapse on May 9, TerraUSD had a market cap of more than $18.5 billion and was the tenth-largest cryptocurrency. Its market cap is now sailing at around $1 billion.
The decision to leave out its algorithmic backed stablecoin TerraUSD(UST) could prove to be a good idea for the terra community going forward, as its been heavily criticized since its inception to the point of failure which brought about the LUNA crash.