‘Recovery Package’ Raises ‘Essentially Zero’ Luna Price by 1,000% Amid Bitcoin, Ethereum and Crypto Crash

Moon

LUNA
the collapsed cryptocurrency designed to support terraUSD (UST

UST
) stablecoin, has soared in the past 24 hours despite falling to near zero this week – a dramatic collapse that has rocked the broader bitcoin and crypto market.

Subscribe Now to Forbes CryptoAsset & Blockchain Advisor and successfully navigate the volatile bitcoin and crypto market

The price of luna, which traded as high as $100 per luna last month, crashed to near zero this week, causing it to completely lose its peg to the US dollar, the UST algorithmic stablecoin, in amid a $1 trillion crypto crash that sent the price of bitcoin down more than 20%.

Now, the managing director of Terraform Labs, developer of the UST and luna, Do Kwon, has launched a relaunch plan that could see ownership of the network split between UST and luna holders, causing a luna price surge of more than 1,000% as traders bet the project could recover.

Want to stay ahead of the market and understand the latest crypto news? sign up now for free CryptoCodex—A daily newsletter for crypto investors and the crypto-curious

MORE FORBESStill has “potential as a currency”By Billy Bambrough

“While the UST has been the central narrative of Terra’s growth story over the past year, the Terra ecosystem and its community is what deserves to be preserved,” Kwon wrote in a Publish on a Terra discussion forum, adding that the Terra community “needs to rebuild the channel to preserve the community and developer ecosystem.”

The replenishment – effectively a reboot of the terra blockchain – would create 1 billion tokens to be distributed among the various community players, 40% going to luna holders before UST unanchored, 40% to UST holders “prorated to at the time of the new network upgrade”, 10% to luna holders before the channel was shut down, and 10% to the “Community Pool to fund future development”.

The blockchain that underpins Luna and UST has been shut down multiple times this week to “prevent governance attacks” following “serious [luna] inflation.”

Terraform Labs and the Luna Foundation Guard, responsible for supporting the UST, this week printed several billion luna tokens – increasing the luna supply from 340 million last week to 6.5 trillion – in a failed attempt to maintain the peg of the UST to the dollar.

Register now for CryptoCodex—A free daily newsletter for the crypto-curious

MORE FORBESCrypto Price Alert: Fed Triggers $10,000 Bitcoin Crash WarningBy Billy Bambrough

“Terra needs a community to continue to grow and restore value to its block space – the only way to do that is to ensure that token holders before the attack begins, the community’s most loyal members and builders, remain to continue providing value,” Kwon wrote, adding that the ecosystem will not survive “in its current state.”

In a follow-up tweet threadKwon said he was “heartbroken” about the collapse of Luna and the UST, but said he was confident that “the community will form a consensus around the best path forward for her. -even and will find a way to get up”.

Other members of the crypto community have also suggested that the project may still survive in some form with Binance CEO Changpeng Zhao, often known simply as CZ, saying there have been “progress” made.

“Luna blockchain resumed, no more minting”, CZ post to Twitter. “And deposits, withdrawals and exchanges have resumed. Exchanges are important for existing holders.”

Luna and UST’s collapse this week came amid a slowdown in the bitcoin, ethereum and broader crypto market that left the UST vulnerable, with some speculating it could there was an orchestrated attack on the stablecoin.

“The pullback in general markets created the conditions for an attack on the UST, which was inherently fragile,” Cory Klippsten, founder and CEO of bitcoin shopping app Swan Bitcoin, said in a Telegram message. adding: “The effects of the outcome are far reaching, and the ultimate magnitude is still unknowable.”