Nine days ago, Do Kwon, founder of Terraform Labs shared his plan to revive the Terra Ecosystem after the stablecoin UST and crypto Luna of Terra faced an intensive downfall in the latest market crash. On 26 May 2022, the Terra community proposal was approved for reviving the crypto.
The Twitter account of a Terra official stated,
“Terra 2.0 is coming. With overwhelming support, the Terra ecosystem has voted to pass Proposal 1623, calling for the genesis of a new blockchain and the preservation of our community.”
Terra Community Proposal: The Revival Plan
The Terra community proposal 1623 that was passed on Wednesday with 65 percent of votes in favor, 13 percent against, and 21 percent abstained. As Terra stated over Twitter, the latest “Terra 2.0” will be considered the official “Terra” chain. In the meantime, the token and old chain will be renamed LUNC and Terra Classic respectively.
The present Terra chain and also the ecosystem collapsed earlier this month after the TerraUSD stablecoin lost its back to the dollar. This created a “debt spiral” event whereby users retrieved their UST for LUNA en masse. In the end, the price of LUNA collapsed to zero because of the rapid devaluation, and UST fully lost its peg.
The Terra community proposal surrounding the latest chain is designed for recovering the value for harmed UST and LUNC holders. It will issue the latest tokens (LUNA) to those owners who are based on snapshots of their UST and LUNC holdings leading up to the collapse. Terra explained,
“$LUNA will be airdropped across $LUNA Classic stakers, $LUNA Classic holders, residual $UST holders, and essential app developers of Terra Classic.”
Particularly, 35 percent of the latest LUNA will be spread to old LUNA holders from prior to the network being “attacked”. Do Kwon thinks that a particular set of large UST sales were part of a successful and coordinated effort to destabilize the stablecoin.
Another 35 percent will be split among pre-attack UST holders, post-attack UST holders, and post-attack LUNA holders. Ultimately 30 percent will be offered to the community pool for helping to fund long-term Terra developers.
The wallet addresses for the Luna Foundation Guard and Terraform Labs will be eliminated from the Terra airdrop whitelist, however. This is to assure that the latest Terra chain is completely owned by the community.
Will Terra Community Proposal Restart The Work?
Many within the crypto space have shown disapproval of Do Kwon’s try to revive the ecosystem and the Terra community proposal as well. Binance CEO Changpeng Zhao thinks that forking the blockchain will not offer the new coin any value.
Frequently Asked Question
The old blockchain will be known as Terra Classic (LUNC) and the latest blockchain will be known as Terra (LUNA), the firm tweeted. The Luna token is the latest and it should not be mixed with the old one under a similar exact name.
Terraform Labs CEO and founder Do Kwon formulated the Luna Foundation Guard, a consortium whose role it is to safeguard the peg. The LFG had nearly $2.3 billion in bitcoin reserves, with aims to expand that to $10 billion worth of BTC and other crypto assets.