According to the latest Bloomberg tweet, experts are pessimistic about the future of the Luna 2.0 coin, which is down more than 50% in the past week.
The hits are coming as supporters of the failed Terra blockchain created a new digital token to compensate investors who were burned by one of crypto’s biggest disasters.
Despite the outcry from the Terra community on social media, Do Kwon and his team at TerraForm Labs opted to build an improved version of the blockchain as a measure of damage control. On the other hand, the launch of Terra 2.0 didn’t go as planned.
The new coin was trading at a fair value, roughly $19. Despite a good start, the price of the coin fell to $2.9 within a few days.
probe hovering over terra
LUNA 2.0 is not only losing face but also seems to be failing. The founder of Terra and his crew are currently being investigated by the US and South Korean governments due to possible money laundering.
The Terraform Lab team is being pursued by South Korean authorities for embezzling BTC reserves that could have saved UST from losing its peg. Do Kwon and his associates are also suspected of committing tax evasion of $80 million.
TFL and Do Kwon are being investigated in the United States over the status of UST. In addition, the US Securities and Exchange Commission (SEC) wants to know whether UST was issued as an illegal and undeclared security.
Experts share their thoughts
Bloomberg gathered the views of 4 experts on the future of LUNA 2.0—all of whom believed that Terra 2.0 had no future.
Mati Greenspan, founder of Quantum Economics, looks like LUNA 2.0 will not be able to expand. It was merely a means for large investors who lost their money in the UST and Luna crashes to recover some of their losses. There is no clear reason why the price of Luna 2.0 has gone up.
“Luna 2 was never going to last; it was only a way for people who were strongly committed to make back some of their losses at the cost of new money coming from the promotion of doing so.” Why should it ever grow.”
Kunal Goyal, Messari AnalystSaid that LUNA 2.0 will not be able to flourish as it was created during a downturn in the market.
The value of the original LUNA (LUNC) came from its association with the UST. Unfortunately, LUNA 2.0 lacks that support. Plus, the Terra team’s legal problems aren’t helping matters.
“There are several issues with Terra 2.0. It went online in a macro and crypto environment that was not conducive. It has no clear point of difference from other smart contract platforms because it lacks an algorithmic stablecoin. Ultimately, investors Regulators are concerned about the overhang.”
Riyadh Carey, Analyst at Kaiko, believes that Terra 2.0 will struggle to gain traction in a market dominated by established competitors such as Ethereum, Avalanche and Solana. LUNA 2.0 also suffers from the removal of the UST link and the lack of a burning mechanism.
“LUNA 2 will struggle to stand out in the dense L1 ecosystem, which includes big names like Avalanche and Solana, as well as Ethereum.” While the original Terra had a thriving community, much of it revolved around UST and AUST (UST Earning Yield in Anchor).
“Certainly, the burning of Luna to generate UST affected part of the price volatility. In short, Luna 2 lacks this mechanism, will suffer inflation in the form of implied/unlocked, and will undoubtedly There will be stigma attached to the biggest crypto crash. As a result, the road ahead will be challenging.”
According to Khalilullah Baigo, CEO and co-founder of KoinBasketInvestors have lost faith in Terraform Labs and Doo Kwon, and everyone wants Luna 2.0 to end as soon as possible.
“Everyone wants to get out of the new Luna because founder Do Kwon has lost the public’s trust and confidence.” Luna’s future is bleak. Even when given the opportunity, the founders didn’t build firewalls around the algorithm.
“It is because of this that he has overplayed his hand.” It is no longer possible to build a new Luna within an existing community. From such speculative coins, smart money will move to basic coins. ,