After the spectacular collapse of so-called stablecoin TerraUSD (UST) and its sister cryptocurrency Luna, the founder of the Terra ecosystem proposed a “revival plan” to start anew, and its validators voted in support.
Under the new plan from Terra’s 30-year-old mastermind, Do Kwon, a new Terra chain will be created with a new Luna (LUNA) as its native token. It will leave UST behind, abandoning the algorithmic stablecoin that failed weeks ago. The current chain will be referred to as Terra Classic, and the now worthless Luna will be renamed to Luna Classic (LUNC).
Though 65% of validators moved this plan forward, it’s been met with mixed reviews. Big exchanges such as Binance and FTX have pledged their support for the new chain, while many everyday investors are confusedand unsure.
Among those completely uninterested in the new Terra 2.0 is billionaire investor Mark Cuban.
When asked whether he’d invest in the new ecosystem, Cuban was blunt: “No,” he told Coins2Day.
Cuban hadn’t invested in UST or the original Luna cryptocurrency in the past: “Not involved at all. Never have owned any,” he previously told Coins2Day, adding that he also turned down investing in Anchor, a Terra-based decentralized finance (DeFi) protocol.
That’s because to him, “crypto is like investing in any other business. You look to see if it’s a sustainable product or service.”
As an algorithmic stablecoin, UST holds value based on a code striking a balance between the stablecoin and its partner coin, Luna. Every time a UST token is minted, the equivalent of $1 in Luna is “burned,” or removed from circulation, and vice versa, to maintain the peg. To incentivize the longevity of this setup, Anchor promised users a 20% return if they deposited their UST into its application.
Obviously, the Terra ecosystem didn’t pass the test for the Shark Tank investor and Dallas Mavericks owner.
Cuban—who is an avid cryptocurrency investor with a portfolio of various digital coins, NFTs, and blockchain-based companies—was burned by an algorithmic stablecoin in the past. In June, his investment in Iron Finance’s TITAN crashed in an apparent bank run.
His main takeaway? “Do your own research,” Cuban told me.
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