New Luna, Old Story: Terra's new token wipes out 70% wealth in less than 48 hours

economictimes.indiatimes.com:

Terra were bruised badly as the newly issued Luna token promptly plunged. The Luna 2.0 tokens issued over the weekend saw a knee-jerk reaction. According to Coinmarketcap data, the tokens were issued at $17.8 and eventually zoomed to $19.53 on May 28. However, in less than 48 hours, it nosedived over 70 per cent to Rs $5.45 on Monday. A key element of Terra's revival plan was to deliver new Luna tokens to holders of the project's now vastly depreciated UST stablecoins as well as to holders of the older, existing Luna tokens.

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The older tokens have been renamed Luna Classic (LUNC), with a market cap of less than a billion dollars, which was more than $40 billion a couple of months ago. According to the market participants, it is unclear how the new Luna will be collateralized, and there is a lack of transparency around reserve assets needed to support the coin. Things are not likely to change anytime soon, they say. Sharat Chandra, VP- Research & Strategy, EarthID, said, «Hard forking the chain without addressing the underlying algorithm that failed to keep the peg was wishful thinking for the founder and community members who voted for Terra2.0.» Investors had lost faith in the Terra ecosystem, and a mere change of chain nomenclature without fixing the root cause of the debacle isn't going to help the cause of the revival of Terra, he added. The total market capitalization of Luna.20 is estimated to be around $1.28 billions, based on the current price and total circulation of 210,000,000 Luna 2.0 tokens as of now. Its supply is capped at 1,000,000,000, according