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Do Kwon's luna revival attempt sets off roller coaster trading weekend

Holders of the collapsed luna and UST coins were airdropped new luna tokens Saturday.

Do Kwon

Do Kwon's plan to revive the collapsed Terra ecosystem launched Saturday to mixed results.

Photo: Woohae Cho/Bloomberg via Getty Images

A listing on Binance brought a surge of trades Tuesday for luna 2.0, an attempt by crypto entrepreneur Do Kwon to revive the collapsed Terra blockchain ecosystem.

The coin was trading at about $9.50 early Tuesday morning, a roughly 50% increase in the past 24 hours, according to CoinMarketCap. Binance listed the new luna coin at 2 a.m. Eastern Time Tuesday, placing it in its Innovation Zone, a trading designation reserved for coins that "may have increased volatility and pose a higher risk than other tokens."

Unsurprisingly, the new luna has indeed been volatile. It launched early Saturday with a list price of $17.80 and climbed for a short time but then quickly fell to a low of just under $4. Even with the gains Monday and early Tuesday, the new luna is off about 50% from its listing price.

The coin was airdropped to holders of the previous version of luna and its affiliated TerraUSD, or UST, algorithmic stablecoin. Both currencies lost nearly all value earlier this month in a bank-run-style sell-off that helped push down values in the broader crypto market.

Under a plan from Kwon, approved last week, the original Terra blockchain was split off and will now be known as Terra Classic, while the original luna coin that crashed near zero this month has been renamed luna classic with the ticker LUNC. The new luna trades as LUNA.

The UST stablecoin will be left behind and not receive a new version on the recreated blockchain.

The plan was an attempt by Kwon to save some of the apps built on the Terra blockchain after that collapse, and recoup some value for investors in the original ecosystem. Some holders of the former luna and UST coins pledged to sell as soon they received the airdrop.

Not all is going smoothly with the airdrop. Terraform Labs, the developer behind the plan, tweeted Monday that it is "aware that some have received less $LUNA from the airdrop than expected [and] are actively working on a solution."

In addition to Binance, the relaunch is being supported on a list of large exchanges such as FTX and Bitfinex. Two major staking firms, Figment and Chorus One, said they are sitting out the relaunch, citing concerns with the voting process and how quickly the new chain was launched.

After the spectacular implosion that followed the TerraUSD and luna only weeks ago, there is plenty of skepticism for version 2.0 of the ecosystem. Billy Markus, dogecoin's co-creator, tweeted ahead of the relaunch that “luna 2.0 will show the world just how truly dumb crypto gamblers really are."

Regulators will surely be watching as well — and the industry is bracing for new rules to come on stablecoins.

Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at rdeffenbaugh@protocol.com.
terraterraform labsdo kwonlunacryptocurrency
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