Rescuing Terra: Founder Do Kwon's revival plan 2.0 wins, launch on 27 May
Premium- The Terra Ecosystem Revival Plan is deemed to be a new approach altogether especially the abandoning of stable coin TerraUSD or UST. That means they are creating a new Terra chain without the algorithmic stable coin.
A much-needed win for the Terra founder Do Kwon as his proposal bags approval to transform its Terra ecosystem with a new blockchain and this time it won't include stable coin algorithm. It is called Terra 2.0 and the new chain is scheduled to launch on May 27. Binance who also lost heft from the Terra sisters crash this month - has also announced working with the Terra team on the recovery plan.
On Wednesday, Terra powered by LUNA through their Twitter account said, "Terra 2.0 is coming," adding, " With overwhelming support, the Terra ecosystem has voted to pass Proposal 1623, calling for the genesis of a new blockchain and the preservation of our community."
The Terra Ecosystem Revival Plan is deemed to be a new approach altogether especially the abandoning of stable coin TerraUSD or UST. That means they are creating a new Terra chain without the algorithmic stable coin.
In Terra's revival plan document, it is said that the old chain is to be called Terra Classic (token Luna Classic - LUNC), and the new chain to be called Terra (token Luna - LUNA).
Further, Luna will be airdropped across its Luna Classic stakers, Luna Classic holders, residual UST holders, and essential app developers of Terra Classic. Also, TFLs' wallet will be removed in the whitelist for the air drop - making Terra a fully community owned chain.
It needs to be noted that, new LUNA tokens will be distributed to previous holders of UST and LUNA in an 'air drop' manner that will rely on snapshots taken of the old Terra network for verifying participants.
In its revival plan, Terra also said that due to technical constraints, it is not possible to include all UST and LUNA holdings on Terra and other chains in the snapshots. Assets that may not be included are:
- UST or LUNA bridged off of Terra,
- Users with bridged UST or LUNA who would like to be included in the post-attack snapshot need to bridge back to Terra before the snapshot is taken
- UST or LUNA on Terra protocols that cannot be easily identified
- All protocols listed on DeFi Llama here (Terra TVL - DefiLlama 6.7k) will be covered, in addition to a few others that are known.
- UST or LUNA on CW3 multi-sig contracts
- Most UST and LUNA in CW3 multi-sig contracts will be accounted for, but there could be edge cases.
Meanwhile, the large portion of the token distribution will be in two forms. Firstly, providing an emergency runway for existing Terra dapp developers, and secondly, aligning the interest of developers with the long-term success of the ecosystem. Moreover, network security to be incentivized with token inflation - with a staking rewards target of 7% p.a
Terra in the statement has stated that essential app developers committing to launch on Terra will receive:
1. Emergency allocation (0.5% of total supply): Immediately after network launch to provide for runway while they build out the product. Commit to returning funds if the product has not been launched in 1 year.
2. Developer Alignment Program (1.5% of total supply): Protocol teams that were live in Terra Classic divide this allocation weighted by the last 30-day TVL from the Pre-attack snapshot - 1-year cliff, 3-year vesting thereafter. Accommodations will be made for apps where TVL is not applicable.
3. Developer Mining Program (8% of total supply): Essential app developers earn a share of the mining program proceeds pro-rata to the amount of TVL every quarter for 4 years.
The network will be launched on May 27.
As per CoinMarketCap, Terra USD traded higher by over 23% at around $0.08632. While Terra LUNA traded at $0.0001811 higher by over 14% currently.
Binance earlier today also said, "The Terra community just passed a vote to ‘Rebirth Terra Network’. Adding it said, "We are working closely with the Terra team on the recovery plan, aiming to provide impacted users on Binance with the best possible treatment. Stay tuned for further updates."
After the Terra crash, Binance founder Changpeng Zhao had earlier said how he became poor from his $1.6 billion worth of investment in LUNA. During the year 2018, Binance received 15 million tokens of LUNA for its investment of $3 million into the Terra network. At its peak in April this year, the investment in stable coins reached a whopping $1.6 billion. However, Zhao did not sell any of LUNA, and when the stable coin crashed to zero limits.
Today, Do Kwon also shunned a rumor about him contacting the top five exchanges in South Korea for listing LUNA 2.0.
As per Heraldcorp, Do Kwon has contacted the top five exchanges in South Korea asking for a $LUNA 2.0 listing. On which, Do Kwon tweeted saying, "Yeah no I did not."
Do Kwon who is the founder of Terraform Labs had earlier proposed a revival plan called as 'hard fork' for Terra ecosystem which meant splitting the blockchain in half. However, later, it was decided to entirely bring in a new blockchain, reconstruct the network and leave the old network to be managed by users.
Earlier this month, Terra's crash raised the question of what happened to its $3.2 billion reserves that were built in Bitcoin and other crypto assets, to prevent such an outcome.
As per Elliptic Enterprises Co-founder and Chief Scientist Dr. Tom Robinson, in his blog that was latest updated on May 16, highlighted that Terra now claims that the movement of the $3.5 billion in Bitcoin reserves – was conducted to sell the majority of it, in an unsuccessful attempt to support the UST stablecoin. Holders of the LUNA token and UST stable coin collectively lost around $42 billion over the past week. However, $85 million in crypto assets remains in the Terra reserve to compensate them.
