What’s the Price of Failure in the Crypto Sector?

Second chances are important in personal relationships, but in business they should be given with more skepticism than seems to be present in crypto.

Case in point, Terra 2.0.

The blockchain behind the $45 billion collapse of the terraUSD stablecoin earlier this month is being resurrected as Terra 2.0. And it’s getting some traction, although not as a stablecoin.

To briefly recap, terraUSD (UST) was an algorithmic stablecoin that maintained its dollar peg by an arbitrage system with a second, related cryptocurrency, terra — called LUNA on exchanges to avoid confusion. When terraUST started losing its peg, the price of LUNA crashed from around $85 to fractions of a penny in less than seven days. Everyone holding either token lost everything.

See also: TerraUSD’s Price Collapse Shows Vulnerability of Dollar-Pegged Cryptos

Now the developer behind UST and LUNA, Do Kwon, is working to resurrect the LUNA blockchain as Terra 2.0, using a hard fork to break off and burn most of the old tokens, making it a developer platform that will, it is hoped, make investors some of their money back.

Read more: PYMNTS Blockchain Series: What Is Bitcoin Cash? The No. 2 Payments-Focused Crypto Goes Its Own Way

It’s not the only crypto project given a new lease on life. The cross-chain bridge protocol Wormhole — hacked for $320 million in February — is still growing, despite a long series of hacks calling into question the security of bridges altogether.

Also see: PYMNTS Crypto Crime Series: With $1B Hacked, Cross-Chain Crypto Payments May Be in Jeopardy

Despite the hack on its Ethereum-to-Solana bridge, Wormhole has opened two more bridges to major blockchain projects, Cosmos and Algorand, just this month.

And Wormhole far from alone. The Ethereum Classic blockchain — a fork of the No. 2 crypto — was hit by three 51% attacks in a row in 2020 for a total of about $9 million.

See more: The 51% Attack: Crypto’s Double-Spending Achilles Heel

Another bridge project, THORChain, was reportedly for more than $8 million twice in July. The bZx lending protocol was hacked three times in 2020 and 2021, with the final theft draining some $55 million. Deus Finance was reported to have been hit twice since March, with hackers taking $3 million and $13 million.

LUNAcy or Good Investment?

Nor does the UST collapse appear to be Do Kwon’s first attempt at a stablecoin. CoinDesk reported after the crash that Do Kwon had created — behind an obviously fake name — an earlier algorithmic stablecoin called Basis Cash that failed to take off. While that didn’t fail but rather failed to catch on, it was reportedly unknown to investors.

Hold for a moment for some name clarification: LUNA tokens have been renamed LUNA Classic — LUNC on exchanges —and the new Terra blockchain’s tokens have taken over the name LUNA.

While the new LUNA crashed on launch from $19.54 to as low as $3.63, its gaining momentum, with the price back to about $9 to $10 since Monday, two days after its launch. Now, $1.5 billion has changed hands in the last 24 hours.

And it’s not the only troubled project on the LUNA Classic/old Terra blockchain. Mirror — a DeFi project not affiliated with Do Kwon — on the blockchain apparently suffered a $90 milllion hack back in October that was only discovered this week, according to The Block.

There’s also the involuntary second chances given to developers who work — and even raise venture capital funding, behind pseudonyms — often very obvious ones — that no one took the time to vet.

One of the most famous of these is Chef Nomi, creator of a significant DeFi project, SushiSwap,. He briefly absconded with several million before apologetically returning it, saying it was a misunderstanding, not a rug pull con.