The Big Terra Crash that shook the crypto market
TERRA Luna and the its stable coin were rising on a lot of money.
There were big institutional investors who know a lot about money.
So much was the non stop promise of the Terra Luna blockchain that the Terra Luna rose from almost nothing to almost $119 per coin.
Then the big crash happened when the Terra UST peg broke and the value of UST started falling.
Then Terra cot printed till an enormous rate but it did not help much.
Even most of the BTC in the reserves were used to buy UST but it could not salvage the project.
Before the common investors could even understand the technicalities of the event. Both Terra Luna and its UST stable coin were biting the dust.
The revival plan
The revival plan involves creating a new blockchain and renaming the old Terra chain as Terra Classic.
The New Terra coins would be airdropped to the holders of coins of the old chain.
This would be a process unfolding over the next few years!
The UST or the stable coin part of the project that failed would be abandoned.
What is missing in 2.0
Every one seems to be focusing on building the new blockchain however what about the broken trust.
What is being done to restore the trust of thousands of people around the world?
Why there is no proposal to compensate the investors?
What was their fault in all this?
For someone to lose money in the market there has to be some one making money. This is how markets work.
So far there is no thrust to uncover the culprit.
More then anything why there is no one taking responsibility for the events.
The world is governed by cause and effect.
In the case of the Terra Luna debacle how can the project simply sweep everything under the carpet start a new chain and simply move on?
Are there any fail safe mechanisms being thought of or built into the version 2.0 of Terra?
If so why no one is talking about it?
Even after such a big crash there is no talk or thought of an underlying security or a king of insurance then where are we heading?
In such a case do we need to brace for another Terra crash this time for version 2.0.
This may not happen tomorrow but may be waiting to happen sometime in the future.
There has to be more transparency and accountability
This goes for not just Terra but is also a warning bell for all crypto projects and startups.
One understands that businesses see success as well as failures.
However can business projects be allowed to operate in a state where no one is accountable for the failure.
There is lack of transparency and you can simply mange to burn the business down. Start afresh and raise more money?
Raising more money could be difficult
With so much money being lost would the big investors be willing to give more money to the Terra project for 2.0 based projects?
With the price of Terra and UST down so many projects which are being built on the Terra blockchain are going to find the going extremely tough with these Terra Prices.
Would the Terra 2.0 prices skyrocket the day the new chain is launched? It is difficult to imagine that happening because fresh money and trust are not easy to come by in a blockchain which has experienced such a big blow.
There is need to rebuild the trust
What I say here holds generally true for any project that is trying to rebuild.
The community may be divided and the team spirit may be bruised.
With investor confidence at an all time low I bet the project think tank would need to do lots of things to restore investor confidence in the project.
A way to pay back the loyal investors as part of the roadmap and keeping provisions for fail safe mechanisms which have been tested on the test net and simulations could be a positive start for sure.