The epic scale of Terra’s collapse has left it with no chance of revival. Of course, some attempts to regain users’ trust are being made now, however, it’s clear they won’t succeed for several reasons.
First of all, the market correction continues, pulling the plug on the long-term growth of some coins. A fun fact — much of the respite in the market in recent weeks is mainly due to the actions of Luna Foundation Guard representatives, who sold 80,081 BTC to keep the UST algorithmic stablecoin pegged. At the same time, major wallets with a balance of 10,000 coins and more acquired a similar volume of 80,742 BTC during the same period. Due to this, they turned from net sellers into buyers. Such a coin shakeout, from weak to strong hands, happens on the market constantly, so there’s nothing to be surprised about. However, this dynamic doesn’t mean that there will be a market reversal anytime soon: the current technical view implies that the value of BTC will dip to $20,000.
Secondly, there are plenty of like-for-like projects with a spotless reputation, which investors like Solana, Near, Avalanche, and others can focus on. Those who put their trust in Terra got burned badly, whereas people who preferred other blockchain networks are unlikely to dare to invest in a failed project. Right now, speculators are “playing” with the coin, but soon, after all those willing to take a chance lose money, they will get bored and find a new pastime.
Third, for the most part, there was no life on the Terra network. As we remember, Anchor Protocol was the main project on the blockchain, which only gained popularity due to the high deposit rate in UST. Investors took the bait of the 20% yield on stablecoins: in April, about 72% of the UST issue was locked in project pools. Namely, after the yields began to fall, people lost interest in Anchor Protocol and UST in particular. From May 6 to 8, the pools’ balance dropped by $2.3 billion on the eve of the fall. As a result, there were problems with liquidity and a complete collapse of UST and LUNA.
To summarize, Terra is just another phony project on the cryptocurrency market with no real value, which was of interest only from a speculative point of view. These types of projects make up the major share of the market (actually, maybe all of them are like this, besides Bitcoin and Ethereum), just not all of them disappear instantly like Terra. Usually, this process is delayed, and they are forgotten slowly. Who will remember NEO, DASH, NEM, and other top market representatives from 2017 now? So, buying LUNA or LUNC right now is clearly not worth it — it is better to focus your attention on projects whose reputation isn’t at an all-time low.
