The newly launched Terra 2.0 surged to a high of $19.53 on Saturday before dropping to about $4.39, with the tokens having begun trading in exchanges like Kucoin, Huobi, and Bybit.
Various analysts have expressed concerns about Terra’s revived blockchain since it will have to compete with the layer-one blockchains, including Ethereum, Cardano, and Solana.
Stablecoin TerraUSD used algorithms to maintain its peg to the value of the USD. A price drop caused traders to exit the asset class leading to a crash alongside LUNA tokens.
Terra is distributing Luna tokens through airdrops to the holders of the rebranded Luna classic before the collapse and the UST stablecoin holders to enable them to recoup losses. The move to revive the network was voted by Terra blockchain supporters.
The Vice President of corporate development at cryptocurrency exchange Luno, Vijay Ayyar, remarks that investors were unlikely to trust Terra the second time after unprecedented losses.