*By Orlando Telles
In the last few weeks, we have faced one of the biggest drops in the history of the crypto market and the great representative of this event was Earth (MOON)an asset that occupied sixth place in the market value ranking, and fell by more than 99.99%.
Even with this catastrophic scenario, the CEO of the institution behind the Earth has a plan to recover the coin, and in this article we will analyze whether this is, in fact, possible.
before understanding how Earth wants to solve the problem, we need to take a step back and remember the similar crisis that has already been faced by Ethereum (ETH).
In 2016, when the first applications were being built on Ethereum, a large decentralized organization named DAO contained over $156 million of users. This institution was hacked through a security hole and the hacker managed to embezzle more than $60 million.
At that moment, the solution found was to “hard fork” the Ethereum network, that is, to create a new crypto.
The Ethereum we know today is a copy of the Ethereum that existed back then, while the original network has become relatively abandoned and is currently known as Ethereum Classic (ETC).
What is ‘hard fork’ and how can it change
the future of the Earth (LUNA) network?
The Earth plane (LUNA)
The proposal to save MOON was created by Do Kwon, the project’s main co-founder and CEO, and was voted on by the community. The strategy is to create a new crypto MOONand the asset that has existed to date would be renamed “MOON Classic”.
This new network would no longer have the stablecoin USTsince it was the point of failure in the blockchain architecture of Earthresponsible for creating the “death spiral” that destroyed the project.
According to the governance proposal, the new tokens would be distributed as follows:
- 25% — Community pool, controlled by governance;
- 1% — Emergency Allocation to Essential Developers;
- 4% — Essential developers;
- 35% — Token holders MOON “pre-attack”;
- 10% — Holders of MOON at some point in the future, before the new token is released;
- 25% — Holders of UST at some point in the future, before the launch of the new token.
As for the proposal, two controversies caught the attention of the community. The first one refers to users who had tokens MOON stored on crypto exchanges. What guarantees that exchanges that receive the new tokens will, in fact, pass them on to the legitimate owners?
The second controversy refers to the low proportion of tokens directed to former investors and the same 35% being available to future investors who buy tokens. MOON and UST.
It seems that governance wants to encourage investors to buy MOONS and USTs in the market today, something that could temporarily raise the price of assets and benefit those who still want to dump them on the market, a very suspicious behavior.
When this restructuring plan will go into effect is yet to be decided. Furthermore, what prevents leaders from delaying this date just to encourage the purchase of the old tokens? MOON and UST by users who want to receive the new tokens?
Community reception has been very negative with the new proposal. The truth is that currently Earth it is a dead blockchain, literally. The production of new blocks was stopped by the validators for security reasons.
Many projects such as Polygon (MATIC) and Fantom (FTM), are already fighting for the developers who were with the MOONso the original team didn’t have many chances to get back on the market.
As much as the hype around new tokens could increase the price of MOON minutely and temporarily, it would still not be sustainable. After the launch of the new tokens, current holders of the asset would have no incentive to hold onto them.
I do not believe that Earth has any viable option to rebuild itself at this moment, and even if it makes no sense to speculate on the screen price of a project like this, which has completely lost the confidence of the market.
*Orlando Telles is a founding partner and director of research at Mercurius Crypto, a cryptocurrency research house.
The specialist is responsible for risk management and fundamental analysis of the main projects in the cryptocurrency market of the house. With a specialty in actuarial science, Telles currently produces analysis and content distributed by the largest crypto players in Brazil.
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THE Money Times publishes informative articles of a journalistic nature. This publication does not constitute an investment recommendation.