Terra 2.0 Is Preparing to Launch. Could This Spell a Turnaround?

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • Earlier this month, LUNA lost its peg while trying to stabilize TerraUSD, losing 99.9% of its value in the process.
  • Now, Terra launches Terra 2.0 in an attempt to start a blockchain separate, but parallel to the original, which will now be known as Terra Classic.
  • So far, we are seeing a price jump for Terra (LUNA), but investors have reason to be wary and proceed with caution.

Just weeks after a dramatic downfall, Terra is back in a fresh, new blockchain.

Just weeks ago, we saw LUNA lose its peg as TerraUSD plummeted into the abyss. If you don't remember, let's begin with a quick refresher. TerraUSD was a stablecoin that became unstable. A stablecoin in cryptocurrency, is a currency that has a valuation of $1 that is pegged to or backed by another currency. Some are backed by actual dollars or equivalent commodities stored in a bank so their valuation is secure; examples of these are Tether (USD) or USD coin (USDC). But some stablecoins are backed by other cryptocurrencies, making them slightly more vulnerable to volatility. Cue Terra USD.

Terra USD (UST) was backed by its sister coin LUNA. And earlier in May, TerraUSD lost almost all of its value and subsequently took LUNA down with it. As the price dropped, investors began to panic and sell, resulting in the value going down even more. So LUNA had to flood the market with more coins to keep that ratio of $1 worth of UST used to mint $1 worth of LUNA. This caused massive inflation as so many LUNA coins entered the market. It was a painful cycle to watch, and in the end, LUNA lost 99.9% of its value in just a week.

What's next for the sister coins?

Now in the wake of the fall, Terraform has been entertaining proposals for a new Terra Blockchain. What was called Terra will become Terra Classic. And the new chain will be called Terra 2.0. The native token will still be LUNA but this time without the (un)stablecoin UST.

In a tweet on May 23rd, it stated, "Recently, a few community members (including some from TFL) have referred to the proposed new blockchain in Prop 1623 as a 'fork' as opposed to a genesis chain. …Note: The revival plan is not proposing a 'fork' of the existing chain, but rather the creation of a new one."

If you're wondering what this lingo refers to, Terra 2.0 could either be a hard fork from Terra Classic or a new blockchain network altogether. A hard fork means that it would share history with the original chain, but a new chain does not. The tweet is making it clear that Terra 2.0 will not share history with Terra Classic. It will also not replace it, but run parallel.

The bottom line

It seems this news is well-received, as Terra (LUNA) is currently up over 18%. At the time of writing, the live price of Terra is $0.000187 USD, according to CoinMarketCap.

Our top crypto play isn't a token - Here’s why

We’ve found one company that’s positioned itself perfectly as a long-term picks-and-shovels solution for the broader crypto market — Bitcoin, Dogecoin, and all the others. In fact, you've probably used this company's technology in the past few days, even if you've never had an account or even heard of the company before. That's how prevalent it's become.

Sign up today for Stock Advisor and get access to our exclusive report where you can get the full scoop on this company and its upside as a long-term investment. Learn more and get started today with a special new member discount.

Get started

So there we have it. Terra 2.0 becomes the new blockchain of Terra. Investors may be wary of putting trust in the company again. We can certainly hope that they have used the recent failure to learn and come back stronger, but it is safe to say that time will help us tell as well.

Buy and sell cryptocurrencies on an expert picked exchange

There are hundreds of platforms around the world that are waiting to give you access to thousands of cryptocurrencies. Our experts have done the research to pick out the select few top crypto exchanges today.

To help you get started, we're sharing one of our expert's top picks for free -- simply click here to start your crypto journey today.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow