A week after the Terra ecosystem explosion that plunged the market into total panic for several hours, Do Kwon, the founder of Terra, presented a proposal to relaunch the project on Monday, May 16, 2022. This was done on the Terra Agora platform, but also in the form of a multi-part tweet:
This proposal includes the central elements already put forward on the night of May 13 to 14, 2022 by Do Kwon. On Agora, it is specified that the proposal “Terra Ecosystem Revival Plan 2” will be officially submitted to the vote on May 18, 2022.
In broad terms, the idea is similar to the one he presented recently: the Terra ecosystem is rich in valuable projects, and talented developers and it has a strong community, which makes, according to Do Kwon, so many reasons to save the Blockchain structure even without the UST. “Terra is more than $UST” as Do Kwon wants you to believe.
The important points of the Terra Blockchain fork proposed by Do Kwon are:
Fork from the current Terra Blockchain, which will now be called “Terra Classic” (LUNC), to the new Blockchain, which will retain the Terra name and the LUNA token.
The new blockchain will be developed WITHOUT the UST algorithmic stablecoin.
The new LUNA will be distributed as an airdrop between people who own or have owned LUNA, in staking or not.
A large portion of these tokens will be distributed to developers in the ecosystem in order to provide leeway and convince them to stay for the long term.
Terraform Labs' parent company Terra's wallet will not be included in the airdrop so that the new Blockchain is completely self-sufficient.
The staking reward rate of this new inflationary token will be 7%.
Not surprisingly, Do Kwon opted for a hard fork of the Terra blockchain, which would result in splitting the blockchain into two, the old one, Terra Classic, and the new one called Terra.
Do Kwon wants to give priority to maintaining the foundations
Regarding developers, they will benefit from an “emergency allocation” consisting of 1% of the distributed tokens as soon as the new Blockchain is set up so that they can continue to maintain the ecosystem and its applications in complete security. 4% of the total tokens will also be distributed over 4 years to developers in order to reward them, under certain undefined rules to be established by the community via a governance system.
Among the essential applications mentioned in Do Kwon's proposal, we find the most known of the ecosystem, such as the platform dedicated to Terra developers, Setten. We also find the Astroport, a decentralized finance platform (DeFi) widely acclaimed by the community, the Terra Station wallet, the StarTerra launchpad, the Axelar and Wormhole bridges, Nexus Protocol and others.
Technical details and distribution of tokens
One billion LUNA tokens will be distributed in the following way, in addition to the support provided to developers:
25% - Community pool, controlled by staked governance.
1% - Essential Developers emergency allocation. No lockup.
4% - Essential developers (1-year cliff, 4 years vesting thereafter, granted after launch traction)
35% - All bonded / unbonded Luna, minus TFL at “Pre-attack” snapshot
For wallets with < 1M Luna: 1-year cliff, 2 years vesting thereafter
For wallets with > 1M Luna: 1-year cliff, 4 years vesting thereafter
10% - Luna holders (staking derivatives included) at the “Launch” snapshot - 10% unlocked at genesis, 90% vested over 2 years thereafter
25% - UST holders at the “Launch” snapshot - 10% unlocked at genesis, rest vested over 2 years thereafter
The snapshot “Pre-attack” was taken on May 7th, 2022 at 23:00:04 (UTC+8). The “Launch” snapshot will be taken on May 27, 2022, at 3:59:51 (UTC+8). According to Do Kwon, Terraform Labs will be in charge of the preparation of the future infrastructure, its wallet, and the tools related to the development of the new ecosystem. The network validators will be responsible for coordinating the launch of the fork following the relative snapshot.
Timeline
05/17 - Announcement out
05/18 - Governance proposal out
05/21 - Terra Core release is cut, network launch instructions made available for validators
05/25 - Essential app developer registration completed
05/27 - Genesis file created from final launch snapshot
5/27 ~ Network launch
Note that the advanced dates are in UTC+8 (Asia Time).
Mainly negative reactions
Although the proposal has just been made and we can expect more information in the coming days, the reactions are mostly negative for the moment, with part of the community asking for a burn of the surplus LUNA and not a new Blockchain.
An idea recently supported by Changpeng Zhao, the CEO of Binance, who recently stated that the Terra fork would lead nowhere since it “would not create any new value”, and that the most appropriate solution would be to use Terra's BTC reserve with an appropriate LUNA burn to straighten out the UST peg.
The problem is that the reserves of the Luna foundation have already been thrown out the window last week in a vain attempt to repackage the UST:
More than 80K BTC were thus wasted in a totally unnecessary way in the middle of the turmoil. Such reserves could have been used in a more intelligent way probably. At the time of writing, LUNA is trading at $0.00018 and UST at a sad price of $0.08.
Feel free to use the comments to tell me what you think of this proposal by Do Kwon, and more importantly, if you think Terra can still escape extinction.
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Terra really messed up