Thanks to big-shot investors, the Terra network and its leader, Do Kwon, soared to the top tier of the crypto industry, only to collapse in days in May 2022. The value of Terra (UST), a stablecoin designed to track the value of the US dollar, and Luna, its sister coin, both sank. Luna, an unstable stablecoin, was selling for roughly $118 a month ago, but it is practically worthless. Millions of investors, many of whom were from India, lost money due to the cryptocurrency.
A look at its timeline with major events taking place:
Do Kwon and Daniel Shin launch the Terra network in January 2018 with ambitions to develop Chai, an e-commerce payment software and a price-stable cryptocurrency to support transactions against major fiat currencies. It is backed by the Terra Alliance, a group of 15 Asian e-commerce giants.
LUNA is sold to investors in an initial coin offering (ICO) on January 30. Terraform Labs charged 18 cents for each token during the seed round, while during the private sale, they charged 80 cents per token. April: The Terra Money white paper is published by Do Kwon and numerous co-authors.
- The first LUNA staking product was launched on February 24 by a South Korean crypto exchange.
- July 6: Terra’s chief of research, Nicholas Platt, announces the Anchor protocol, a Terra-based platform that allows investors to earn a high yield on their deposits while simultaneously borrowing against their crypto assets.
- The Terra blockchain’s stablecoin, UST, was publicly revealed on September 21, with intentions to deploy on Ethereum and Solana.
- November 28: Do Kwon dismisses the likelihood of a UST/LUNA-style attack, which might throw the company into a death spiral. Some argue that this type of scenario ultimately led to Terra’s destruction in mid-2022.
- LUNA’s price nearly doubled to new highs above $90 on December 22 and is up 58% this month.
January 19: Do Kwon announces the creation of Luna Foundation Guard, a group tasked with “building reserves to support the $UST peg amid unpredictable market conditions” and “allocating resources to assist the growth and development of the Terra ecosystem” through awards.
The Luna Foundation Guard (LFG), based in Singapore, raises $1 billion by selling LUNA tokens to buy bitcoin for the United States Treasury’s reserve system, with Jump Crypto and Three Arrows Capital as the principal investors.
- LFG is rumoured to have purchased bitcoin for $125 million on March 25. (2,840 BTC at the time).
- March 28: The Luna Foundation Guard’s bitcoin wallet address has purchased over 27,000 BTC worth around $1.3 billion in the last six days.
- Terra’s LUNA coins have risen 10% in the last 24 hours, reaching almost $106.
- LFG purchased 5,773 bitcoins (BTC) for $272 million this week.
- According to cryptoanalysis firm Messari, the price of the LUNA token has reached an all-time high of $119.2.
- LFG purchased 5,040 BTC on April 6, bringing its total holdings to 35,768 BTC, valued at $1.6 billion.
- LFG added $173 million in bitcoin to its wallet via a series of purchases on April 11. Its wallet now holds 39,897.98 bitcoin.
- April 19, 2022: LUNA surpasses the overall crypto market by 17% in a single day, driving prices above $90. The third-largest stable coin is now UST.
- April 27: The circulating quantity of LUNA tokens reaches an all-time low of 346 million tokens as they are burned to meet surging demand for UST.
- May 8: After a series of massive UST dumps on Terra’s lending protocol Anchor and stable coin exchange protocol Curve, UST fell to $0.985 on Saturday.
- LFG pledges to lend market makers $750 million in BTC to defend the UST peg and another $750 million in UST to purchase back BTC after volatility has subsided.
- May 9: After UST tries to rebound to $1, deposits on the Anchor protocol drop below $9 billion from $14 billion. The protocol’s token, ANC, dropped 35% during the day.
- UST loses its $1 peg for the second time, falling to as low as 35 cents.
- May 10: Claims that UST’s depreciation results from a Soros-style campaign start to surface.
- May 11: More than half of traders (58%) put futures bets on higher LUNA prices despite Tuesday’s dip, resulting in $63 million in liquidations.
- LUNA approaches price levels last seen in August 2021 on May 11th. Over two days, the value of Anchor, Terra’s largest decentralised finance (Defi) platform, has dropped by $11 billion.
- Do Kwon has been identified as one of the pseudonymous co-founders of the failed algorithmic stablecoin Basis Cash, according to CoinDesk.
- May 12: The price of LUNA drops 96% in one day, to less than 10 cents.
Luna 2.0 Announcement
With the Luna rebirth, Terra is given a fresh lease on life after a devastating crash. But how might a failing cryptocurrency come back to life?
Terra supporters chose to resurrect the defunct cryptocurrency, but it will not be the same as before. The goal is to reintroduce Luna without the ingredient contributing to the cryptocurrency’s two-week demise: its stablecoin, UST.
Terra 2.0 will “essentially generate a new Terra chain sans the algorithmic stablecoin,” according to Terra.
The new Terra, which is expected to go live on May 27, 2022, will essentially create a new blockchain for the Luna coin. Luna 2.0 will replace the previous Luna, entirely severing links with the defunct stablecoin.