Terra to Start A New Blockchain
The Terra community has passed a vote to start a new genesis blockchain on May 27, 2022. With just 65% approval, “proposal 1623” details several changes for Terra and its Luna governance token:
A new Terra chain to be built without an algorithmic stablecoin;
The old chain to be renamed to Terra Classic and its governance token, Luna Classic ($LUNC);
New Luna will be airdropped to Luna Classic holders and other invested parties;
Terraform Labs will remove its whitelisted wallet, making Terra fully community-owned.
Voting difficulties
The decision comes after several tumultuous days in which the Terra network faced several revisions, controversies and a slew of technical challenges which invalidated other votes. Nevertheless, the embattled cryptocurrency has set a new course for its future after a catastrophic collapse on May 11, 2022.
The Terra Ecosystem Revival Plan 2 states that not all assets will be included on the new chain due to “technical constraints.” Some of the affected elements include bridging UST or LUNA off of Terra Classic, CW3 multi-sig contracts and Terras protocols that are not identifiable; however, all protocols listed on DeFi Llama will be covered. DeFi Llama reports that Luna has a Total Value Locked (TVL) of $165M, as of this writing.
Token distribution
The latest amendment will allocate the new Luna tokens to affected investors in the following ways:
Community pool, 30%
Pre-crash LUNA holders, 35%
Post-crash LUNA holders, 10%
Pre-crash UST holders, 10%
Post-crash UST holders, 15%
What remains to be seen
Terra faces an uphill battle to revive not only its coin’s market value but also its marred reputation. Terra’s CEO, Do Kwon, has been heavily criticized by many in the crypto community for his (mis)handling of the crisis. It remains to be seen just how the market will react to Terra's new genesis blockchain. Moreover, Luna Classic will need to garner enough capital from investors to boost the LUNC in order to reimburse Terra Classic investor losses.
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