Home » Do Kwon submits his Terra (LUNA) fork proposal to the community vote

Do Kwon submits his Terra (LUNA) fork proposal to the community vote

by Thomas

Do Kwon, Terra’s CEO who has been struggling for some time, has just submitted a detailed proposal for his Terra blockchain fork project. This includes the implementation of a new LUNA token that will be distributed as an airdrop to people who have owned or possess LUNA in its current form. A proposal that does not have unanimous support.

Terra’s fork proposed to the community

This Monday evening, May 16, Do Kwon published a detailed proposal for the fork of the Terra blockchain mentioned in the night of 13 to 14 May. Posted on Agora, the proposal, dubbed “Terra 2 Ecosystem Recovery Plan”, will be officially put to a vote on May 18.

In broad terms, the idea is similar to the one he presented recently: the Terra ecosystem is rich in valuable projects, talented developers and has a strong community, which, according to Do Kwon, are all reasons to save the blockchain structure even without the UST.

The key points of the fork are:

  • Fork from the current Terra blockchain, which will now be called “Terra Classic” (LUNC), to the new blockchain, which will keep the Terra name and the LUNA token;
  • The new blockchain will be developed WITHOUT the UST 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 give them room to manoeuvre and convince them to stay for the long term;
  • The wallet of Terraform Labs, Terra’s parent company, will not be included in the airdrop so that the new blockchain will be completely autonomous;
  • The staking reward rate for this new inflationary token will be 7%.

Unsurprisingly, Do Kwon has opted for a hard fork of the Terra blockchain, which would split the blockchain into 2, the old one, Terra Classic, and the new one called Terra.

Priority to maintain foundations

Developers will receive an “emergency allocation” of 1% of distributed tokens upon implementation of the new blockchain so that they can continue to maintain the ecosystem and its applications safely.

4% of all tokens will also be distributed over 4 years to developers 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 best known in the ecosystem, such as Terra’s dedicated developer platform, Setten.

We also find the Astroport, a decentralised finance platform (DeFi) widely acclaimed by the community, the Terra Station wallet, the StarTerra launchpad, the Axelar and Wormhole bridges, the Nexus Protocol and others.

Technical details and token distribution

One billion LUNA tokens will be distributed as follows, in addition to developer support:

  • 25% for the community pool, controlled by the blockchain governance system;
  • 35% to LUNA holders at the “Pre-attack” snapshot distributed over 2 or 4 years depending on the LUNA owned at the time;
  • 10% for LUNA holders (including staking) who own LUNA at the time of the “Launch” snapshot;
  • 25% for UST holders at the time of the “Launch” snapshot – 10% distributed at the outset, the rest distributed over 2 years.

Pre-attack snapshot was taken on 7 May at 4pm. The “Launch” snapshot will be taken on 26 May at around 10pm.

According to Do Kwon, Terraform Labs will be in charge of preparing 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.

In summary:

  • 16/05: proposal online;
  • 18/05: proposal put to vote;
  • 21/05: launch instructions made available to validators;
  • 25/05: registration of major apps completed;
  • 27/05: “Launch” snapshot set up, followed by the start of the new blockchain.

(UTC+8 dates)

Although the proposal has just been made and more information can be expected in the coming days, reactions are mostly negative for the moment, with some of the community calling 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 not lead to anything, as it “would not create any new value”, and that the most appropriate solution would be to use Terra’s BTC reserve with an appropriate burn of LUNA to straighten out the UST peg.

At the time of writing, the LUNA token is trading at $0.0002, and UST is trading at a dismal $0.099.

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