Recall that last week the value of UST began to fall sharply, causing the token to no longer be at $1 parity. The UST collapse led to an even more catastrophic drop in the linked Terra token (LUNA), which is now virtually worthless.

To illustrate, here is a chart of Luna over the past week. Yes, the cryptocurrency has managed to rise several times from its bottom, which the riskiest traders have taken advantage of. However, it’s important to keep in mind that before that, its value sagged by nearly 100 percent, so long-term LUNA holders are hardly happy about this jump.

The graph of the rate of LUNA over the last week

Note that at the current value, the market capitalisation of the project is 1.5 billion dollars – which is quite a lot. The reason for such a rate is the crazy growth of coins in circulation, which were issued in an attempt to stabilize the value of UST and raise it to $1.

Graph of the number of LUNA coins in circulation

The situation with UST is still far from ideal. This morning the Stablecoin is priced at 14 cents. Which means that the coin is still not fulfilling its role.

UST cryptocurrency rate chart for the last two weeks

Despite this, representatives of the project expect to somehow save it. Although it is hard to believe in such a thing now.

Can LUNA and UST go back to normal?

Kwon has expressed his thoughts on the official Terra forum. Here’s one of his quotes.

LUNA holders have suffered such severe losses that we are unlikely to recover the entire ecosystem. And while a decentralised economy needs decentralised money, UST has lost so much credibility that it can no longer play its role.

Terra creator Do Kwon

According to Decrypt’s sources, instead of trying to “resuscitate” the Stablecoin, Do Kwon suggested focusing entirely on the network around the Terra blockchain. To “preserve the developer community and ecosystem”, Kwon proposes to reset the LUNA network’s token distribution to 1 billion, of which 40 per cent would be redistributed to holders before UST exits parity.

Another 40 per cent would go to those who own UST at the time of the renewal. The remaining 10 per cent will go to LUNA holders at the time of last week’s blockchain shutdown. In addition, 10 per cent will be used to fund future development of the network.

LUNA’s chart is very similar to that of the “dead” token

Today, LUNA is trading at $0.0002. Recall that the historical high of the token value was set on April 5, that is, almost a month and a half ago. At that time, the coin was able to reach a level of 119.18 dollars.

Read also: The head of Binance is dissatisfied with the actions of the Terra team in the situation with LUNA and UST. Why?

For Do Kwon himself, the collapse of the project was a cause for huge disappointment. He shared his thoughts on the matter on Twitter.

I am heartbroken over the pain my invention has caused all of you.

Kwon noted that he constantly spends time in discussions with big UST and LUNA holders, who have suffered huge financial losses in a matter of days. Money has also been lost by ordinary investors and traders who bought tokens in the first wave of their value drop, counting on a quick rebound. By the way, Kwon is in no hurry to disclose its own losses after the incident.

Neither I nor the organisations I am associated with made any profit from the incident. I did not sell LUNA or UST during the crisis.

Fate has played a very cruel joke with the creator of Terra. Before the problems with UST, there were often rumors in the crypto community about possible malfunctions of the project, but Kwon was always quick to dispel them. Here, for example, is his tweet from May 8, almost a week before the incident.

Anon, you can listen to Influencers for the 69th time about the UST crash. You can also see they’re all poor now, so take your chance.

Binance exchange chief Changpen Zhao shared his opinion on the developments over the weekend. He believes that the Terra network’s hardforward and migration to the Terra2 version will not save the situation, as the new blockchain will not have the same value. In addition, Zhao asked what happened to the bitcoins in the company’s Luna Foundation Guard wallets, which were supposed to be used to provide UST value.

As Terra officials noted, they are preparing a detailed report on what happened.

When a cryptocurrency investment didn’t work out


We think it's rather difficult to hope for the project to recover to its former heights right now. After all, the number of LUNA coins in circulation has increased by thousands of times, against which the cryptocurrency has lost almost all of its value. This, accordingly, has resulted in incredible losses for investors, who have lost their savings. And at the very least, that will be enough for investors to never get involved with anything Do Kwon creates again.

Let’s hope project investors get at least some compensation in the near future. Stay tuned to our millionaires’ cryptochat.