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It seems like Terra 2.0 is not appealing to the investors as much as it should have
One of the most prominent questions, revolving around the crypto market is, will Terra 2.0 be as successful as Terra previously was? As much as Terra developers would like for it to happen, it seems like investors are quite skeptical about it. Currently, Luna is live and the launch of the Terra 2.0 protocol was quite successful. But it was a volatile start for the new crypto and Terra’s price is fluctuating quite excessively. Within a very short period of time, the token plunged by over 67%, and according to coinmarketcap data, at the time of writing this article, the value of Luna is lingering around US$6.00, whereas, it was valued at around US$17 at the time of the launch. This drop in price came directly after Terraform Labs successfully distributed the LUNA 2.0 tokens to its investors who held LUNA Classic and TerraUSD. The token was airdropped on May 28, 2022, with a maximum circulating supply capped at 1 million.
Industry experts predict that the fall of Terra was caused due to several reasons such as the massive dumping of tokens by bulk buyers and sellers. They have also insinuated that investors should have the capability to handle massive market shifts. While algorithmic stablecoins tend to be extremely volatile too, a major portion of the blame goes to the present condition of the crypto market. But currently, the legitimacy of the Terra 2.0 protocol is making things even more difficult for the Terra ecosystem. Even though major cryptocurrency exchanges like Binance are making headway with the Terra development team to reinstate the crypto in the market, it seems investors are having a tough time establishing their faith in the Terra protocol once again.
So, will the Terra 2.0 Protocol be a total bust?
According to reports by the Terraform Labs, LUNA 2.0 was launched under the Phoenix-1, the Terra 2.0 manner. The company also noted that node services, wallets, and explorers can follow the manner that will go live later. But unfortunately, even after intercepting the demands of the LUNA users and delivering accordingly, the community no longer trusts the visions of the Terraform Labs which might indicate that the firm’s propositions no longer yield much value to its investors, or the investors are really in disbelief about its prospects. Without the investors’ appetite to learn more about what Terra 2.0 has to offer, it might become quite difficult for the developers to establish the crypto’s foothold in the market.
Besides the initial facilities that the new protocol is offering, another facility of using LUNA 2.0 is that the token does not share any history with the asset’s first version and it will be based on an entirely new blockchain which will start from block 0 with no dApps to launch.
According to reports, just before UST fell and brought down the entire Terra ecosystem along with it, Luna experienced an increase in demand. The demand for stablecoins saw a decline in demand after the fall of TerraUSD. And the fall of the stablecoin ecosystem caused a huge blow to the crypto market. But like any other crypto investment, digital asset users should also be extremely careful while investing in Terra once again. The fall of LUNA prices even after the launch of the new Terra protocol shows that investors are being quite careful this time.
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