Luna is making like the Phoenix.
Luna 2.0, a new Terra Luna token, is set to launch on May 27, rising from the ashes of the spectacular crash that rocked the cryptocurrency market right down to its socks.
'Terra 2.0 is Coming'
TerraForm Labs co-founder Do Kwon proposed a new chain to replace the existing Terra network, while Luna 2.0 will replace the existing version of Luna, which will be renamed Luna Classic.
A majority of voters approved co-founder Do Kwon's plans to revive the battered ecosystem.
"Terra 2.0 is coming," the company tweeted. "With overwhelming support, the Terra ecosystem has voted to pass Proposal 1623, calling for the genesis of a new blockchain and the preservation of our community."
About 200 million votes were cast in favor of the plan, which ended up being around 65% of the majority. 41 million voted 'no' and 54 million abstained.
The existing holders of Terra Classic will receive the newly created Luna.
'A New Terra Chain'
TerraUSD, or UST, and its sister token, Luna, crashed after UST lost its peg to the dollar, the foundation of it qualifying as a stablecoin, which is a cryptocurrency tied to a more stable asset like the U.S. dollar or gold.
UST lost its dollar peg when millions of investors all wanted to redeem their tokens at the same time.
From May 9 to May 13, at least $55 billion of market cap disappeared, causing colossal losses to many investors. On social media, testimonies of financial ruin have followed, as we previously reported.
UST is an algorithmic stablecoin, which is backed not by dollar reserves but rather by its sister asset Luna, which had to be burned, or permanently destroyed, through a computer code.
Algorithmic stablecoins are different from centralized alternatives like tether (USDT) or USD coin (USDC), which are backed by actual dollars or equivalent assets stored in a bank.
Terra tweeted that revival plan "will effectively create a new Terra chain without the algorithmic stablecoin." Terra will burn the remaining UST supply.
The token and UST were delisted by crypto exchanges Binance and OKX in an effort to protect their customers.
Both exchanges said they would support Luna 2.0.
"These 2 markets will be delisted so these tokens can be renamed to $LUNC and $USTC.," OKX said. "Details can be found in the announcement below. $LUNA is still highly volatile, please manage your risk."
Lennix Lai, OKX's financial markets director, said "I think the whole industry needs to set a high bar when it comes to evaluating whether they list or invest in stablecoins that are backed by things like algorithms."
"If you are going to establish something stable that is backed by volatile assets, it’s going to be really important that you set a high collateralization ratio," Lai said.
'How Truly Dumb Crypto Gamblers Really Are'
"The new Terra 2.0 token $LUNA will be distributed to eligible users based on the project's distribution plan," Binance said. "The distribution ratio per account will be announced separately."
A commenter on Twitter posted a photo of people at a crap table with the caption: "$LUNA crashes 99.99%. Billions and millions lost. Entire net worths gone. Do Kwon: I’m launching LUNA 2.0 Crypto investors:
Dogecoin co-founder Billy Markus didn't hold back his feelings, tweeting that "luna 2.0 will show the world just how truly dumb crypto gamblers really are."