Just recently, LUNA and UST, two of Terra’s native tokens, lost a huge chunk of their value, with LUNA going -99.99% down. Today, both of these tokens are experiencing increased volatility.
Most people believe that these price swings are happening because of the recent announcement of the Terra fork. Earlier this week, a recovery proposal was put out on vote on the Terra community voting platform. Out of the total votes, 78% of the participants voted in favor of a hard fork; the rest voted against it. This proposal means a new LUNA token and discards the current stablecoin, UST. This voting will continue until May 25, when Do Kwon will take the final decision based on the results.
Volatility On the Terra Blockchain Spikes
Following the recent events around LUNA and UST, the volatility around these tokens continues to increase. Fairly enough, UST was more volatile that LUNA these past days. This might be because LUNA’s supply has been increasing drastically recently, making it harder for the price to move. As the voting on the proposal began, the price of UST spiked 200%. Yet, the token crashed to $0.1 minutes after.
The Terra community has mixed feelings about the next step of this project. While some believe that Do Kwon should focus on redistributing the remaining reserves of Terra to investors, most believe that he should work towards a LUNA hard fork.
Vitalik Buterin, the founder of Ethereum, claims that Kwon should indeed work on reimbursing the Terra community. Changpeng Zhao, the CEO of Binance, holds the same opinion.
Should Terra Launch a Hard Fork of LUNA?
Whether Terra should launch a hard fork of LUNA is something that the Terra community will decide through voting. As such, this issue will be dealt with in a decentralized manner. The new hard fork will be known as LUNA, while the current Terra blockchain will be rebranded to Terra Classic; while they will rename the LUNA token to LUNA Classic ($LUNC).
The crash of LUNA and UST was devastating for the whole crypto market. Following that crash, the whole market went downhill, with Bitcoin going as low as $26,000. Today, LUNA is trading at $0.00013, 99.99% under its all-time high of $119.18. On the other hand, the UST stablecoin is trading at $0.07.