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With the launch of a new Luna (LUNC) token, there are several developments within the ecosystem that could impact crypto investors. In this Motley Fool Live segment from “The Crypto Show,” recorded on June 1, Fool.com contributors Jon Quast, Travis Hoium, and Chris MacDonald examine some of the key details behind this new token.
Jon Quast: There was a proposal by the founder of Terraform Labs, Do Kwon, called the Terra ecosystem revival plan, and it passed its vote, and so they actually wound up launching a new Luna token. Now, the old Luna token has been renamed Luna classic now has a different symbol LUNC. As far as I understand, Tara USD is gone at least there’s no stable coin component to the new Luna. With the old Luna, there was a burn mechanism involved that essentially you could make enough or take enough Tara USD away. You control the supply and the demand to meet actual usage from people, that was the idea and you didn’t have to have real dollars backing it, ultimately it crumbled, the whole system fell apart, and so the stablecoin component is now gone. They’re trying to revive the rest of the ecosystem, apparently by bringing back the Luna governance token. This is already out there, it’s already already trading, I believe it’s available on Binance if you wanted to trade this coin.
What’s interesting here is Leidos DAO is a staking DAO that allows you to pull your tokens or Ethereum. A lot of people stake Ethereum through Leidos. But you could also stake Luna, the old version through Leidos if you wanted to. They support many proof-of-stake blockchains. But Luna 2.0 the community overwhelmingly said, we are not going to allow people to stake Luna 2 through Leidos. I just thought that was an interesting development to note. I also want to note that there are some interesting things happening. I don’t know if interesting is quite the right word, but Do Kwon, the founder of Terraform Labs, is under investigation in South Korea for tax evasion. The Luna foundation guard is handling an investigation for money laundering also in South Korea and the entire legal team for the organization has resigned. I don’t know if they have a new legal team now.
Travis Hoium: They resigned after all this stuff happened, to be clear, right?
Jon Quast: Yeah.
Travis Hoium: If there was anything illegal going on, they were involved.
Jon Quast: Exactly, and not interested in defending it. I don’t know, are you guys buyers of Luna 2.0? I don’t really see what the point is without the stable coin.
Chris MacDonald: It’s hard to make the case, they did have a number of other projects on the blockchain previously and them trying to revive their ecosystem makes sense and moving away from the algorithmic stable coin is a strategy, I think a lot of people expected. But I know there was a lot of backlash about how the tokens in this new launch were distributed so I think there were a billion tokens and essentially too many went to maybe like the developer side and the investors and too few went to compensate people who lost everything on the previous version of Luna. There’s no trust there and while a lot of blockchains are supposed to be trust list, the reality is when you’re investing in a project and Travis, you’ve said this a lot with NFTs, you got to know who’s behind it.
If there’s no accountability there, it is interesting to see the South Korean authorities step in and we’re trying to do something, but that’s another thing that we talk about almost every week as the regulatory environment is uncertain and it will be interesting to see what happens with this and what ultimately comes because that could shape what happens in other jurisdictions such as the US, so a lot going on.
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