- Terra’s abandons its original blockchain after the collapse of its native stablecoin
- Terra Co-Founder Do-Kwon First Proposed Terra Rescue Project
- The new project will see the blockchain split into Terra Classic and Luna Classic
Terra is abandoning its original blockchain after its native stablecoin slipped from its peg to the US dollar, Bloomberg first reported.
Terra will split into Terra Classic and Luna Classic following a proposal by co-founder Do Kwon that involved copying the code from the original blockchain and issuing new coins. Luna, which also dropped to near zero this month, will take on the LUNC ticker while Terra’s new blockchain issues a new coin under the name Luna.
The revamp follows one of the biggest cryptocurrency crashes to date, which saw TerraUSD drop to zero. TerraUSD is an algorithmic stablecoin that uses computer code to mint and burn tokens to maintain its peg to the dollar. While Do Kwon touts the pivot as a new day for Terra, it remains to be seen if the overhaul is enough to give investors reason to ignore the once-touted stablecoin’s collapse.
TerraUSD was changing hands at around $0.07 on Wednesday.
New tokens will be issued to current TerraUSD holders in what is called an “airdrop” which requires snapshots of previous Terra networks to authenticate ownership and participation.
Investors are still wary of the new proposal as some are still seeking restitution in light of Terra USD’s collapse. A proposal that preceded Do Kwon’s vote was to burn remaining TerraUSD tokens to erode its supply.