Terra Fork Voting Spikes LUNA, UST Volatility

Terra’s native tokens, UST and LUNA, have witnessed significant price fluctuations in the last two weeks after losing the majority of their value.

Terra Fork Voting Spikes LUNA, UST Volatility

The volatility occurs after Terra’s community voted on its recovery, which offers to hard fork the blockchain into a new version.

The new version will discard the UST stablecoin and a new LUNA token will be created. Terra Classic will be the new name for the old chain.

Early voting indicates that roughly 78% of Terra owners support the hard fork. This contrasts with the results of a preliminary vote and unfavorable online comments. Around 20% of Terra owners voted against the hard fork plan, thus vetoing it. The deadline for voting is May 25.

Increased UST, LUNA Volatility

UST was the more volatile of the two. Prices spiked up to 200% in minutes after the plan was put to a vote, before plummeting to below $0.1. The token then fluctuated around the price before settling at $0.09 at press time, down 28% in the last 24 hours.

In the first few minutes of voting, LUNA prices soared by as much as 10%. Since then, the token has plummeted to as low as 0.00001464 and is currently down over 20% in the last 24 hours.

According to Coinmarketcap data, both LUNA and UST have lost over 99% of their value since the beginning of May. The Terra crash is regarded as one of the most significant value losses in recent history.

The price of the two tokens is influenced by mixed feelings over the hard fork. However, if a Terra version 2 is launched, it is uncertain how prices will work out.

Terra developers torn between these two?

Terra developers were torn between two main paths before the start of the vote: to fork or use current reserves to reimburse investors.

Several prominent members of the crypto community, including Ethereum inventor Vitalik Buterin and Binance CEO Changpeng Zhao. All urged Terra to redistribute its remaining reserves to benefit developers and investors.

Holders of the old chain will receive a new version of LUNA as part of the forking plan. Market participants expect the new coin to follow the same path as its predecessor. Given the lack of goodwill towards Terra following the disaster.