- LUNA price plummets nearly 38% despite a 200% increase in trade volume.
- Do Kwon, CEO of Terraform Labs, has written a proposal to fork LUNA to a new chain with a cap of 1 billion coins.
- Binance CEO CZ believes Do Kwon’s plan to save LUNA will not work as forking does not add value to the new fork.
Do Kwon’s proposal to fork Terra’s LUNA to a new chain has received criticism from Binance CEO and cryptocurrency proponents. The Luna Foundation Guard has spent $3 billion stabilizing TerraUSD’s peg, however, UST has failed to recover.
The Luna Foundation Guard has spent billions of dollars reinstating TerraUSD’s (UST) peg. However, UST price is struggling to make a comeback. At the time of writing, UST is priced at $0.082, 91.8% lower than its $1 peg.
Do Kwon, the CEO of Terraform Labs, came up with a recovery plan for Terra’s tokens. The Luna Foundation Guard Council proposed forking LUNA to a new chain, using a snapshot from before the attack on the blockchain.
The recovery plan proposes a cap of 1 billion coins, where 900 million tokens of the new chain are set aside to be returned to LUNA and UST holders from before the de-pegging event and chain hold, and the last 100 million tranche is to be staked at the network genesis state.
Changpeng Zhao, CEO of the world’s largest cryptocurrency exchange, Binance, critiqued Do Kwon’s recovery plans and revealed that he does not believe that LUNA can recover and make a comeback to $120.
Zhao stated that,
This won’t work. – forking does not give the new fork any value. That’s wishful thinking. – one cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges).
On behalf of Binance, CZ asked the Terra team to compensate retail users first and supported the prioritization of the smallest wallets with UST deposits on Anchor. Binance has nearly $1.6 billion tied up in LUNA’s collapse.
Kwon has requested community members for patience as Terraform Labs works on multiple tasks to stabilize UST, repeg it and drive a recovery in LUNA.
Still, the CEO of CryptoQuant revealed that market maker(s), including the ones hired by LFG, sent 84,000 BTC, equivalent to $2.5 billion, to multiple exchanges last week. It is unclear whether the BTC tokens were sold, but it is likely that Coinbase digested a majority of the selling pressure and efforts to recover algorithmic stablecoin UST failed.
Larry Cermak, VP of research at IntoTheBlock, pointed out that LFG has gone from $3.1 billion in its reserves a week ago to $87 million now as the non-profit organization spent nearly $3 billion on defending UST’s peg. Despite the efforts, the stablecoin collapsed.
VisionPulseTrades evaluated LUNA price trend and revealed that if the bottom is in, LUNA needs to gain confidence among investors to begin a trend reversal. If so, the next bullish target for is capped between $0.00025 and $0.00033.
A recovery to $120 is therefore unlikely for LUNA, as VisionPulseTrades emphasizes the demand for the token comes from investors expecting a recovery and a purchase of Terra by the LFG.
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