Why Does Terra Want to Create a New Blockchain?


Terra is going through a situation that no one in the ecosystem would want to go through. The price of LUNA drops to practically zero, and UST de-pegged with a current price of $0.08.  Small and large investors around the world were affected, and the consequences do not seem to be over.  You can look at this article to know more about how this crisis started and how we got here.

Currently, Terra Labs’ legal team has resigned and the South Korean government is asking for explanations from Do Kwon, the Founder of Terra. However, it’s not all bad news for Terra because there is a voting proposal that will try to give a new life to the Terra ecosystem. Let’s discover what is this about.

Voting Proposal No 1623: Terra’s Second Attempt 

On May 18th, the Terra Builder Alliance shared a governance proposal to have a new Terra chain. In short, here are the proposed measures:

  • Create a new Terra chain without UST
  • The current Terra chain will be named “Terra Classic” 
  • The new name of LUNA will be LUNC (Luna Classic)
  • LUNC stakers will have LUNA via an airdrop.  
  • Incentivize developers about Terra Classic.

The voting process ends in 6 days (May 25th). There are currently more than 150.8 million votes so far which represents 40.04% of total voters. These are the current results:

  • Yes (80.1%)
  • No (0.34%)
  • No with Veto (19.56%)

Terra Vote

More About Terra’s Voting Proposal 2.0

This voting proposal is the second version of the original published on May 16th. The difference between both is that the second proposal tries to save LUNA. Also, the second proposal covers users that bought LUNA after the problem appeared. 

Moreover, the latest Terra’s token distribution will change, It will have the following distribution. More details here.

  • Community Pool: 25%
  • Pre-attack LUNA holders: 35% 
  • Pre-attack aUST holders: 10%
  • Post-attack LUNA holders: 10%
  • Post-attack UST holders: 20%

Also, there will be three token funds for developers:

  • Emergency: It represents 0.5% of the total supply
  • Developer Alignment: It has 1.5% of the total supply 
  • Developer Mining: It has 8% of the total supply 

It’s important to say that many LUNA holders commented that they would prefer a burning mechanism instead of a fork because they want to fix the current algorithm and get back the UST peg. This would also compensate all LUNA holders regardless of when they bought LUNA.

However, there are other voters that want compensation for UST holders with any of the funds that Terra has. That way, users can get more UST.   

Conclusion

The Terra ecosystem is undergoing historic changes that are likely to have even more updates to try to reactivate it as quickly as possible. However, it is necessary not to take hasty measures and most should wait for the ecosystem to rebuild properly. 

We will continue to keep you informed of future decisions that Terra will make now and in the near future.

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