Terra 2.0 (LUNA) Has No Future: Bloomberg Experts Say

0
82
Terra

Terra ecosystem has not been in the news for the right reasons ever since its downward slope collapsed the cryptocurrency market. LUNA’s value dropped below a penny from over $100, and even the stablecoin, UST, lost its USD peg, leading investors to lose even more.

As a means of damage control, Do Kwon and his team, Terraform Labs, decided to create an upgraded version of the blockchain, despite the backlash from the Terra community over social media. However, the launch of Terra 2.0 has not gone as planned.

The new coin traded at a reasonably good price at the beginning, recording around $19. Despite the strong start, the token’s price fell drastically to $2.9

Terra Battling Investigations

Not only is LUNA 2.0 losing looking like a failure. Terra founder and his team are currently facing investigations from the U.S and South Korean governments due to alleged money laundering.

The South Korean authorities are on the tails of the Terraform Lab team for embezzlement of BTC reserves that could have protected the UST from losing its peg. Additionally, Do Kwon and his team are charged with tax evasion amounting to nearly $80 million. 

In the US, TFL and Do Kwon are under investigation concerning UST’s status. In addition, the US SEC wants to establish whether UST was issued as an illegal and unregistered security.

Related 👉Terra Classic: Holders Boosts 525% in a Month  As Investors’ Interest in LUNC Increases 

Bloomberg Experts Share Opinions

Bloomberg recorded four experts’ opinions concerning the prospects of LUNA 2.0 and agreed that Terra 2.0 has no future.

The founder of Quantum Economics, Mati Greenspan, believes that LUNA 2.0 could not grow. It was just a way for the heavy investors affected by the UST and LUNA crash to recoup a fraction of their investments. There’s no identifiable factor to push up the price of Luna 2.0.

“Luna 2 was never meant to survive, it was simply a mechanism for some who were heavily invested in recouping some of their losses at the expense of new money coming in from the hype. I don’t see any reason for the price to go up ever.” 

Kunal Goel, a Messari analyst, stated that LUNA 2.0 could not survive because it was created during market crises.

The original LUNA (LUNC) derived its value from being linked with UST. Unfortunately, LUNA 2.0 doesn’t have that backing. Also, the legal issues surrounding the Terra team are not helping.

“Terra 2.0 suffers from multiple problems. It has gone live in an unfavourable macro and crypto environment. Without an algorithmic stablecoin, it has no clear point of differentiation from other smart contract platforms. Finally, the regulatory overhang is a key concern in investors’ minds.”

Riyad Carey, an analyst at Kaiko, believes that LUNA 2.0 and Terra 2.0 will find it difficult to dominate a market where big players like Ethereum, Avalanche, and Solana are already established. Also, the loss of the UST link and lack of a burning mechanism is a negative factor in LUNA 2.0.

“LUNA 2 will have a difficult time distinguishing itself in a crowded L1 ecosystem with large players like Avalanche and Solana and of course Ethereum. While the original Terra had a fairly robust ecosystem, much of that activity was centred around UST and aUST (UST earning yield in Anchor).”

“Additionally, some of the price action was based around the burning of LUNA to create UST. So now Luna 2 doesn’t have this mechanism, will be facing inflation in the form of vesting/unlocks, and obviously has the baggage of being tied to the largest ever crypto collapse. So it will definitely be a tough path forward.”

According to the CEO and founder of KoinBasket, Khaleelulla Baig, Terraform Labs and Do Kwon have broken the trust of investors in the industry, and now everyone is looking to ditch Luna 2.0.

“Everyone wants to exit the new Luna as the founder Do Kwon has lost credibility among the community. Luna has no future. The founder didn’t build firewalls around the algo even when they had an opportunity to do so.” 

“That’s why they have lost credibility. Building the new Luna within the existing community will not make any sense now. Smart money will move to fundamental coins from such risky coins.”

Read also 👉New Terra USD (UST) Validator Set To Launch, Will Transfer 10% Commissions To UST Victims While Also Supporting All Burning Proposals