Do Kwon, one of the co-founders and a major decision-maker of the Terra blockchain, announced another plan to restore the ecosystem after a fall in the value of both the native token of the blockchain, LUNA and its native programmable stablecoin, UST. As told by Kwon, Terraform Labs will put forth a new governance proposal on May 18 to fork the Terra blockchain.
A fork happens whenever a community makes a change to the blockchain’s protocol or basic set of rules. When this happens, the chain splits, producing a second blockchain, that shares all of its histories with the original, but is headed off in a new direction.
According to Do Kwon, the new chain will not be linked to the TerraUSD (UST) stablecoin. He also mentions that the old Terra blockchain will continue to exist with UST and will be called Terra Classic (LUNC). Under Kwon’s plan, if passed, the new LUNA blockchain will go live on May 27.
What Do Kwon is saying
Do Kwon announced this plan in a Twitter trend. He stated, “It has been inspiring to partake in the dynamic discourse regarding the best next steps for Terra. Taking feedback from the community and thoughtful proposals, I would like to suggest the following for the path forward.
“Currently, these key precepts underpin most schools of thought: The #LUNAtic community is unparalleled in its passion; The builder talent pool is broader and deeper on Terra than most ecosystems; Terra’s blockchain is incredibly robust, as attested to by recent events. At the same time however, competing interests from varied stakeholders (e.g.,$LUNA holders, $UST holders, Terra builders, etc.) make it extremely difficult and unlikely to achieve consensus on a cohesive, congruent plan.
“It would be devastating for broader crypto adoption and advancement if we remain in entropy amidst opposing views, and as such I propose the following to chart the path forward for our ecosystem. The Terra chain as it currently exists should be forked into a new chain without algorithmic stablecoins called “Terra” (token Luna – $LUNA), and the old chain be called “Terra Classic” (token Luna Classic – $LUNC). Both chains will coexist.
“New $LUNA will be airdropped to $LUNC stakers, holders, residual UST holders, and essential app developers. Also, TFL’s wallet will be removed from the airdrop, making Terra a fully community-owned chain. We believe this token distribution, in addition to best efforts by LFG to make $UST holders whole, best solves for the varying interests and time preferences for each stakeholder group, and most important, creates the most viable path to revive the Terra ecosystem.
“Terra 2.0 is focused on developers – developers will get an immediate emergency allocation of Luna tokens to fund runway, as well as a pool of tokens earmarked to align the interests of the base layer with its builders. Call to action: we encourage Terra developers to signal support & commit to build on the fork on public channels ASAP.
“TFL will be initiating a governance proposal for the network fork in the next few hours – if the proposal passes, then it will coordinate the fork with validators next Friday 05/27. The Terra community is my family. I will always be here, no matter how hard it gets. Let’s build it back up again – together.”
What you should know
- Earlier today, the Luna Foundation Guard, the ecosystems’ steward, disclosed that it used up an overwhelming portion of its cryptocurrency reserves trying to defend UST’s peg during market sell-off.
- As a result, it is unlikely that the Terra ecosystem can salvage itself without the help of external capital. Changpeng Zhao, CEO of Binance, said that he would support Terra’s community but would like to see more transparency from the entity as to recent events.
- LUNA is still trading below a cent and UST is still depegged.
