Terra backers vote to revive luna — but not UST — after $60 billion crypto collapse

Terra backers vote to revive luna — but not UST — after  billion crypto collapse


The UST stablecoin plunged below its intended $1 peg in May, causing panic in the crypto market.

Gabby Jones | Bloomberg | Getty Images

Backers of Terra have approved a plan to revive the failed cryptocurrency venture — without the controversial stablecoin that helped trigger its stunning demise two weeks ago.

“With overwhelming support, the Terra ecosystem has voted to pass Proposal 1623, calling for the genesis of a new blockchain and the preservation of our community,” Terra’s official Twitter account posted Wednesday.

The proposal would lead to the creation of a new blockchain — a shared ledger of transactions — and its associated luna token, which is now worthless after investors fled en masse in the crypto equivalent of a run on the bank.

Earlier this month, terraUSD, a so-called stablecoin, plunged below its intended $1 peg. That led to panic in the crypto market, with investors dumping its sister token, luna.

TerraUSD, or UST, is what’s known as an “algorithmic” stablecoin. Through some complex engineering, it was designed to maintain its dollar value through the creation and destruction of UST and luna, which would — in theory — help balance supply and demand.

That’s different from how many major stablecoins, like tether and USDC, are meant to operate — as in, with actual fiat currency held in a reserve to support the dollar peg in the event clients withdraw their funds.

At their height, luna and UST had a combined market value of almost $60 billion.

Skeptics abound

Under the new proposal, Terra plans to distribute tokens to holders of the old luna — soon to be renamed “luna classic” — and UST tokens.

About 30% of tokens will go to a pool of investors in the Terra community; 35% will go to those who held luna before its collapse; 10% to pre-collapse UST holders. A further 25% of tokens will be allocated to traders who still own luna and UST after the crash.

Luna spiked more than 20% Wednesday, according to CoinGecko data. UST was up over 50%.

Many market observers remain unconvinced Terra’s revival plan will work.

“There has been a massive loss in confidence overall in the Terra project,” said Vijay Ayyar, head of international at the Luno crypto exchange.

“This is a very crowded space already with a number of already well entrenched platforms that have lots of developer activity. I don’t see why Terra would succeed here.”

The Terra debacle has knocked investor confidence in bitcoin and the broader crypto market, which has collectively lost roughly $600 billion in value in the past month alone.

Regulators are becoming concerned, with the likes of Federal Reserve Chair Janet Yellen and European Central Bank President Christine Lagarde calling for urgent regulation of crypto — especially stablecoins.



Source

Nvidia insiders dump more than  billion in stock, according to report
Technology

Nvidia insiders dump more than $1 billion in stock, according to report

NVIDIA founder and CEO Jensen Huang speaks during the NVIDIA GTC Paris keynote, part of the 9th edition of the VivaTech technology startup and innovation fair, held at the Dôme de Paris in the Porte de Versailles exhibition center in Paris on June 11, 2025. Mustafa Yalcin | Anadolu | Getty Images Insiders at artificial […]

Read More
Tesla’s IPO was 15 years ago. The stock is up almost 300-fold since then
Technology

Tesla’s IPO was 15 years ago. The stock is up almost 300-fold since then

CEO of Tesla Motors Elon Musk waves after ringing the opening bell at the NASDAQ market in celebration of his company’s initial public offering in New York June 29, 2010. Brendan McDermid | Reuters At the time of Tesla’s IPO 15 years ago, the company had generated roughly $150 million in revenue in its lifetime. […]

Read More
At 20 years old, Reddit is defending its data and fighting AI with AI
Technology

At 20 years old, Reddit is defending its data and fighting AI with AI

Reddit CEO Steve Huffman stands on the floor of the New York Stock Exchange (NYSE) after ringing a bell on the floor setting the share price at $47 in its initial public offering (IPO) on March 21, 2024 in New York City. Spencer Platt | Getty Images News | Getty Images For 20 years, Reddit […]

Read More