“Terra 2.0,” a so-called revival plan for the Terra blockchain ecosystem has been approved with plans moving forward, after the conclusion of Wednesday’s vote among network validators, which saw a 65% approval rate. A ‘snapshot’ of the Terra blockchain is expected to take place this week ahead of the launch.
This comes after a bank run on the Terra blockchain, saw $50 billion in market capitalization wiped off between Terra’s native token, LUNA and its programmable stablecoin, TerraUSD (UST), earlier this month.
A snapshot is a recording of the state of a blockchain at a specific point in time. It will allow Terra to send the newly issued LUNA tokens to holders of the old LUNA. This would, in theory, allow old holders to regain some of their lost investment value while incentivizing usage of the new blockchain.
What you should know
- Terra’s co-founder Do Kwon came up with a revival plan in the days afterwards, proposing a fork of the blockchain and an airdrop to holders affected by the UST implosion. The plan tries to make the community whole while reviving their trust in the Terra ecosystem.
- A blockchain fork usually refers to the creation of a new blockchain with data from the old blockchain. While this plan may seem like a fork, Terra developers have stated that Terra 2.0 will be an entirely new project, and no data from the current chain will be carried on to the new one.
- According to the revival plan, investors who held over 10,000 LUNA tokens before UST’s implosion will receive the new tokens periodically, to prevent immediate selling. Over 30% of their tokens would be unlocked initially, and the remaining 70% would be released over two years. New tokens will be distributed after six months to such holders.
- Wallets with more than 1 million LUNA or UST prior to UST’s depegging from the U.S. dollar would have to wait more than a year before receiving any tokens, with a four-year vesting period thereafter.
- The snapshot for Terra 2.0 is expected on Thursday. Terra developers said in a post that, “Going by block times, the post snapshot block, 7,790,000, could happen as soon as May 26, 2022, 16:20:00 UTC.”
- They further added, “The supply at genesis is considerably lower than anybody is anticipating, closer to 116.7M rising to 182M after [one] year.” They said this, addressing community concerns about a highly inflated LUNA supply.
The revival plan, although passed by Terra’s network validators, was pushed live even as results from a preliminary online poll on a hard fork plan found minimal backing among community members. Some 92% of over 6,220 voters on a previously held online poll voted against the change, with the most popular responses calling for “no fork,” as reported.
