The developers behind the failed stablecoin TeraUSD have voted to abandon the token in favor of creating a new blockchain and digital asset, weeks after the cryptocurrency collapsed. As part of the recovery plan for the Terra ecosystem, developers will create a new Terra blockchain with a revived Luna token.
Unlike most other major stablecoins backed by other assets, TeraUSD’s value was derived by complex algorithmic processes, tied to another pairing token called Luna. The two tokens have lost almost all of their value since TeraUSD, known as UST, fell below a 1:1 peg against the dollar earlier this month.
Under Do Kwon’s New Approved Structure, Native Blockchain Will Be Called Earth Classic, while its parent token Luna, which fell to near zero this month, will be renamed Luna Classic, with the ticker LUNC.
The new Terra Blockchain will begin running a coin under the existing Luna name and ticker, and will not include the TeraUSD stablecoin. “Terra 2.0 is coming. With overwhelming support, the Terra ecosystem has voted to pass Resolution 1623, which calls for the origin of a new blockchain and the preservation of our community,” the tweet read.
Terra backers will distribute the new Luna tokens to Luna Classic and UST holders. In a tweet, Terra said that it will be working with crypto exchanges Binance and Bybit to distribute the new assets to people holding Luna Classic and UST on the exchanges.
This process means that TerraForm Labs is effectively abandoning the stablecoin TeraUSD, or UST, which will from now only trade on the Terra Classic blockchain. Designed to maintain a 1-to-1 peg against the dollar, it was trading at around 10 cents on Wednesday.
TeraUSD, one of the world’s largest stablecoins, lost a third of its value earlier this month. cryptocurrency Investors are partly contributing to bitcoin’s decline.