Terra Chief Do Kwon Proposes Hardfork of Terra Blockchain to Restore Ecosystem

UTC by Bhushan Akolkar · 3 min read
Terra Chief Do Kwon Proposes Hardfork of Terra Blockchain to Restore Ecosystem
Photo: Unsplash

Terra chief Do Kwon has proposed the idea of forking the Terra blockchain and distributing the new LUNA tokens among wallet holders, LUNA holders, developers, UST holders, etc.

Last week, the monumental fall of the Terra ecosystem took the crypto world by storm. Terra’s UST stablecoin has lost its peg to USD entirely while the LUNA crypto has collapsed to $0. On Monday, May 16, Terra chief Do Kwon proposed a revival plan to restore the Terra ecosystem. Kwon proposed a hardfork of the Terra blockchain to a new network. The latest proposal is in addition to the revival plan he shared last week.

The new Terra blockchain will have a billion LUNA tokens, distributed to the existing LUNA and UST holders. Besides, the team will also distribute them as fund development to other Terra apps. In his revival plan, Kwon mentions:

“Fork the Terra chain into a new chain without the algorithmic stablecoin. The old chain to be called Terra Classic (token Luna Classic – LUNC), and the new chain to be called Terra (token Luna – LUNA). Luna to be airdropped across Luna Classic stakers, Luna Classic holders, residual UST holders, and essential app developers of Terra Classic.”

Distribution of One Billion LUNA Tokens after the Terra Hardfork

As said, Do Kwon proposed creating one billion LUNA tokens which will be part of the newly forked Terra blockchain. Explaining the token distribution, Kwon said that a quarter of the forked tokens would go to a community pool on the forked chain and controlled by staking governance.

The rest 35% will go to the wallets that held Luna prior to the hack, 10% to Luna holders at the launch of the new chain, 5% to developers, and 25% to UST holders on a vesting schedule.

“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,” wrote Kwon in his Twitter post.

He further added that Terra 2.0 will further focus on developers who “will get an immediate emergency allocation of Luna tokens to fund runway”. Do Kwon said that he will put the proposal for governance vote on Wednesday, May 18.

After the recent collapse of the Terra ecosystem, billionaire Bill Ackman has lashed out at Terra. He wrote:

“When I read about the ‘algorithm’ of @terra_money it sounds just like a crypto version of a pyramid scheme. Investors were promised 20% returns backed by a token whose value is driven only by demand from new investors in the token. There is no fundamental underlying business”.

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