Beginners Guide

What is Terra 2.0? How To Buy LUNA 2.0 Tokens?

Written by: Qadir AK

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Jun 22, 2022

As Terra blockchain failed and TerraUSD lost its peg to the dollar nearly three weeks ago, a new iteration referred to as Terra 2.0 or Luna 2.0 is about to be released. A new Luna coin will also be produced as a result. Here's what you need to know.

Before Moving to what is Terra 2.0? First Let's get a flashback Of what Really Happened With Terra (LUNA)

The Historic Crash!

The algorithmic stablecoin UST, which is built on top of the Terra protocol and is a driving force behind its entire ecosystem, lost its peg on May 9th.

Because of the way the algorithm works, traders were able to redeem 1 UST (which was trading below $1) for $1 worth of LUNA. This design was meant to destroy the UST and restrict its supply which, in turn, should have boosted its value. However, selling pressure was intense, and UST never got close to its $1 target.

This enabled dealers to print LUNA in large quantities, resulting in a tremendous supply of over 6 trillion LUNA in just a few days. Needless to say, such rapid supply growth in such a short period of time, with no ability to absorb it, resulted in the unavoidable — LUNA's price plummeted to $0.

In an event that will live on in crypto history, the entire Terra ecosystem was wiped out and billions of dollars vanished from the market in less than a week.

What is Terra 2.0?

TerraForm Labs CEO Do Kwon has proposed a Terra Luna hard fork to rebuild the ecosystem. Here, the existing Terra blockchain would be split into two blockchains. The current chain and the new chain would exist at the same time but operate differently.

Kwon has officially put forth a governance proposal ...

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