Terra co-founder Do Kwon has unveiled a detailed plan to hard fork Terra and revive the network’s ecosystem. It will involve abandoning its algorithmic stablecoin, and launching a new cryptocurrency to replace its old governance token, LUNA.
- The proposal is a follow-up to Kwon’s informal plan he posted last week, in which he admitted that UST was a failed stablecoin, and that the blockchain needed a fresh restart.
- It roughly reflects his original plan to distribute 1,000,000,000 new LUNA tokens to prior TerraUSD (UST) and LUNA holders as compensation for their recent losses.
- UST now trades at just a tenth of its intended dollar value, while LUNA has collapsed to virtually zero following its hyperinflation.
- The current, devalued LUNA token will have its ticker changed to LUNC – aka “Luna Classic” – while the old Terra Chain will be called “Terra Classic”.
- “$UST peg failure is Terra’s DAO hack moment – a chance to rise up anew from the ashes,” wrote the co-founder.
- The DAO hack was an exploit that occurred early in Ethereum’s development and inspired the chain to hard fork – leaving behind an old blockchain now called “Ethereum Classic”.
- Kwon stressed that maintaining the Terra developer ecosystem is what’s most important, and has since tweeted that “Terra is more than UST”. According to his plan, 5% of the new LUNA token’s supply will be allocated to “essential developers”.
- Terraform Labs will put up the proposal for a governance vote on May 18th, Asia time.
- His proposal made no mention of the Luna Foundation Guard’s role within the new network. The reserve sold almost all of its Bitcoin holdings in an attempt to recover the dying UST.