The Terra blockchain will split and effectively ditch its native stablecoin in the wake of its collapse

Brian Evans
Updated ·2 min read
11
Stablecoins
Tether, USD Coin, and Dai are the three largest stablecoins by market capitalization, according to the price-tracking website CoinMarketCap.Muhammed Akan/Shutterstock

  • Terra's is scrapping its original blockchain after the collapse of its native stablecoin

  • Terra's co-founder Do-Kwon first proposed the project to salvage Terra

  • The new project will see the blockchain split into Terra Classic and Luna Classic

Terra is scrapping its original blockchain after its native stablecoin slipped from its peg to the US dollar, Bloomberg first reported.

Terra will split into Terra Classic and Luna Classic following a proposal from co-founder Do Kwon which involved copying the original blockchain code and issuing new coins. Luna, which also plummeted to near-zero this month, will take the ticker LUNC while Terra's new blockchain will issue a new coin under the Luna namesake.

The revamp follows one of the largest cryptocurrency crashes to date, which saw TerraUSD fall to zero. TerraUSD is an algorithmic stablecoin which uses computer code to mint and burn tokens to maintain its peg to the dollar. While Do Kwon is touting the pivot as a new day for Terra, it remains to be seen if the revamp is enough to give investors reason to overlook the collapse of the once-touted stablecoin.

TerraUSD was changing hands at roughly $0.07 Wednesday.

New tokens will be issued to current TerraUSD holders in what's called an "airdrop" which necessitates snapshots from Terra's previous networks to authenticate ownership and participation.

Investors are still wary of the new proposal, as some are still seeking restitution in light of Terra USD's collapse. A proposal that preceded Do Kwon's vote sought to burn the remaining TerraUSD tokens to erode its supply.

 

Read the original article on Business Insider