according to Bloomberg’s most recent tweetSpecialists are pessimistic about the future of the Luna 2.0 Token, which has plummeted more than 50% in the last week
The successes have come about because the backers of the failed Terra blockchain created a new digital token to reward investors who were affected by one of the biggest cryptocurrency disasters.
Despite protests from the Terra community on social media, Do Kwon and his team, Terraform Labs, opted to build an improved version of the blockchain as a damage control measure. The launch of Terra 2.0on the other hand, it did not go as planned.
The new coin was trading at a reasonable price, hovering around $19. Despite a great start, token price plummeted to $2.9 in a matter of days.
Investigations flying over Terra
LUNA 2.0 is not only losing prestige, but also appears to be a flop. Due to possible money laundering, the Terra founder and his team are currently under investigation by the US and South Korean governments.
The Terraform Lab team is being persecuted by South Korean authorities for embezzling BTC reserves that could have prevented the UST from losing its peg. Do Kwon and his collaborators are also suspected of evading taxes to the tune of $80 million.
TFL and Do Kwon are being investigated in the United States about UST status. Also, the US Securities and Exchange Commission (SEC) wants to know if the UST was issued as an illegal and undeclared security.
Experts share their thoughts
Bloomberg gathered the opinions of 4 experts on the future of LUNA 2.0; everyone believed that Terra 2.0 has no future.
Quantum Economics founder Mati Greenspan, feels that LUNA 2.0 will not be able to expand. It was just a means for big investors who had lost money in the UST and LUNA crashes to recoup some of their losses. There is no discernible reason for the Luna 2.0 price to go up.
“Luna 2 was never supposed to last; it was just a way of doing it for people who were heavily committed to recouping some of their losses at the expense of new money coming in from the hype.” I don’t see why the price should ever go up.”
Kunal Goel, analyst at Messarihe claimed that LUNA 2.0 could not prosper because it was built during a market downturn.
The value of the original LUNA (LUNC) came from its association with UST. Unfortunately, LUNA 2.0 lacks such support. In addition, the legal problems of the Terra team do not help.
“There are several problems with Terra 2.0. It was brought online in a macro and crypto environment that was not favorable. It does not have a clear point of differentiation from other smart contract platforms because it lacks an algorithmic stablecoin. Finally, investors are concerned about excessive regulation.
Riyad Carey, analyst at Kaiko, feels Terra 2.0 will struggle to gain traction in a market dominated by established competitors like Ethereum, Avalanche, and Solana. LUNA 2.0 also suffers from the removal of the UST link and the lack of a recording mechanism.
“LUNA 2 will struggle to stand out in a dense L1 ecosystem, which includes big names like Avalanche and Solana, as well as Ethereum.” While the original Terra had a thriving community, much of it revolved around UST and aUST (UST earnings performance in Anchor).”
“Certainly, the burning of LUNA to generate UST played some part in the price fluctuation. Long story short, Luna 2 lacks this mechanism, will face inflation in the form of grant/unlock, and will undoubtedly carry the stigma of being linked to the biggest crypto crash in history. As a consequence, the road ahead will be challenging.”
According to KoinBasket CEO and co-founder Khaleelulla BaigInvestors have lost confidence in Terraform Labs and Do Kwon, and they all want Luna 2.0 removed as soon as possible.
“Everyone wants to get out of the new Luna because the founder, Do Kwon, has lost the trust of the public.” Luna’s future is bleak. Even when given the opportunity, the founder did not build firewalls around the algorithm.”
“That is why they have exaggerated their hand.” It is no longer possible to build the new Luna within the existing community. From these types of speculative currencies, smart money will migrate to basic currencies.”