After the Luna crypto crash saw Luna and TerraUSD collapse, holders were left wondering whether a Luna recovery is possible.
Amid the crash, Terraform Labs CEO Do Kwon offered a Luna recovery plan to stabilise the current crypto wreckage, introducing the new Luna 2.0. This came amid countless Luna delistings and trade suspension from exchanges, including Wrapped Luna.
Dubbed as one of the biggest crypto crashes ever, seeing Luna drop over 99.9% and UST lose its peg, here's a look at the Luna recovery plan proposed by Kwon.
Luna Recovery: Do Kwon's Terra Recovery Plan
After first proposing a Luna recovery plan that prioritised absorbing the UST supply, Do Kwon implemented an alternative idea that would restart the Terra Luna ecosystem and focus on saving the Layer-1 instead.
In a Terra Ecosystem Revival Plan on the Terra Research Forums, Kwon revealed a Luna fork proposal, that would launch a new chain. Luna 2.0 launched in late May.
The Terra Luna vote on Terra Station passed with 65% of validators in favour. While holders on social media were particularly against the plan, this is not matched by Luna stakers who voted.
The plan offered a major shakeup that involves a new Terra chain without a stablecoin. This created a new Luna and left behind Luna Classic (LUNC).
Here, a new Luna with a supply of 1 billion will be distributed. 35% of this Luna was allocated to pre-attack Luna holders, and 10% to current Luna holders. A further 10% went to pre-attack UST holders, and 20% to current UST holders. The final 25% went to a community pool, with 10% marked for development.
In a previous Twitter thread, Kwon reversed his initial focus on UST towards Luna. "I still believe that decentralised economies deserve decentralised money – but it is clear that UST in its current form will not be that money," he said.
"Terra needs a community to continue to grow and make its blockspace valuable again," said Kwon in his previous plan. "The only way to do this is to make sure that token holders before the attack commenced, the most loyal community members and builders, stick around to keep providing value."
The alternative path towards a Luna recovery proposed by some Luna holders involves a Luna burn. By destroying much of the circulating supply, they hope it would push the price up without a fork.
The Luna Classic community, perhaps surprisingly to Do Kwon and the TFL team, remains vigilant. Check out the latest Luna Classic news to learn more about their recent updates.
Is Luna Recovering?
While the Luna Classic price remains much lower than its pre-crash price, it now sits between $0.0005 and $0.0004, with a market cap of around $3.5 billion. With this, LUNC is the 28th largest cryptocurrency.
LUNC is now up 420% in 30 days, and 87% in one week. Of course, it is still down 91% from its market cap all-time high of $41 billion in April 2022.
On the other hand, Luna 2.0's price recently surged 200% after a large whale made a huge buy. Luna 2.0 is now the 56th largest cryptocurrency at $5.98, and a $969 million market cap. It had previously hovered around the $1.50-$2 range but has soared over 200% in the last 24 hours.
Is UST Recovering?
The UST recovery has not yet happened, with the TerraUSD stablecoin still a long way off its $1 peg.
Now dubbed UST Classic (USTC), it is now trading at $0.04 - down 96% from its peg. However it is still far above the UST low of $0.006 from June.
As LUNC has recovered in the last month, USTC has too, slightly. It is up 40% in the last 30 days.
The UST recovery, which would see the stablecoin repeg to $1, now seems more uncertain. While Kwon's initial recovery plan seemed to prioritise this repeg of UST, the community does not appear to agree.
Perhaps blaming UST for the collapse of Luna, they instead wanted to first focus on Terra Luna and the Layer-1, before then saving UST.
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