1 k

Terra 2.0 Vote Passes to Launch New Blockchain and Revive Ecosystem

Terra co-founder Do Kwon’s proposal to hard fork the Terra network and rebuild its ecosystem has passed.

The new chain – which will launch on May 27th – will not include a relaunch of the algorithmic stablecoin TerraUSD (UST).

The Revival Plan

Terra proposal 1623 passed on Wednesday with 65% of votes in favor, 13% against, and 21% abstained. As Terra explained over Twitter, the new “Terra 2.0” will be deemed the official “Terra” chain. Meanwhile, the old chain and coin will be renamed Terra Classic and LUNC respectively.

The current Terra chain and ecosystem collapsed earlier this month after the TerraUSD stablecoin lost its peg to the dollar. This caused a “debt spiral” event whereby users redeemed their UST for LUNA en masse. In the end, LUNA’s price collapsed to zero due to rapid devaluation, and UST completely lost its peg.

The plans surrounding the new chain are designed to recover value for harmed UST and LUNC holders. It will issue new tokens (LUNA) to those owners based on snapshots of their LUNC and UST holdings leading up to the collapse.

“$LUNA will be airdropped across $LUNA Classic stakers, $LUNA Classic holders, residual $UST holders, and essential app developers of Terra Classic,” explained Terra.

Specifically, 35% of new LUNA will be distributed to old LUNA holders from before the network was “attacked”. Do Kwon believes that a specific set of large UST sales were part of a coordinated and successful attempt to destabilize the stablecoin.

Another 35% will be split between pre-attack UST holders, post-attack LUNA holders, and post-attack UST holders. The final 30% will be dedicated to the community pool to help fund long-term Terra developers.

The wallet addresses for Terraform Labs and the Luna Foundation Guard will be removed from the airdrop whitelist, however. This is to ensure that the new Terra chain is entirely community-owned.

WIll the Restart Work?

Many within the crypto community have expressed disapproval of Do Kwon’s attempt to revive the ecosystem. Binance CEO Changpeng Zhao believes that forking the blockchain will not grant the new coin any value.

Bitcoin live price
price change

Nevertheless, both Binance and Bybit will be assisting with the new airdrop. The exchanges will help bring tokens to investors that had their coins deposited in exchange wallets.

Stay up to date with our latest articles