Do Kwon’s Proposed Terra ‘Revival’ Plan – forking the LUNA Blockchain
Terraform CEO Do Kwon proposed a Terra Ecosystem Revival Plan 2 on 16th of May. Let us look at the details of this proposed creation of Terra Classic plan to maintain the peg of $UST.
$UST loses peg to $1
Terra’s stable coin UST remains de-pegged since 9th May. Last Monday, UST came down as low as 60 cents. This created a mayhem among investors and Luna Foundation Guard came into action. LFG, the steward of UST stable coin reportedly raised funds to maintain UST $1 peg.
In a biggest ever private token sales, LFG raised $1 Billion from several venture capitalists. However, the success of the private token sales has not helped UST maintain its peg. It is still trading well-below $1 peg.
Binance’s $1.6B LUNA Stash Now Worth $3000
In 2018, Binance invested $3 million in the Terra ecosystem and their investments turned to a mind-blowing $1.6 billion later on. However, the investments soon popped when UST lost its peg. As per the Tweet from Binance CEO, CZ, the investment is now worth just around, $2400. He made clear that the tokens are still in the wallet where they were from the day one.
Zhao is requesting Terra team to compensate retail traders despite occurring heavy losses. Protecting users is the first priority of Binance and that can be done by protecting the retail users of Terra.
Meanwhile LFG sold more than 80000 BTC, around 99% of their reserves to compensate affected UST users. This has created instability and led to the price drop of Bitcoin.
Do Kwon’s Proposed Terra ‘Revival’ Plan – forking the LUNA Blockchain
Terra is losing investors trust and they came up with revival plan 2 to gain investors trust and bring stability to the native currencies. On 16th May, Do Kwon posted Terra Ecosystem Revival Plan 2 which suggest a fork in the Terra chain into a new chain without the stable coin.
According to Do Kwon, Terra is more than $UST and the Terra ecosystem and its community are worth preserving.
Terra ecosystem has hundred of developers and millions of users worldwide. Therefore, it is prudent to plan an action to help them. In revival plan 2, the current Terra chain would be forked into two chains. The older one would be known as Terra Classic with the token – Luna Classic or LUNC and the new chain would be called Terra with the token- LUNA. Luna Classic will continue link with $UST however the new chain would move forward without the algorithmic stable coin.
LUNA would be airdropped among the developers, stakers, holders of Luna Classic and UST holders too. This new chain, Terra would be completely community owned as the Terraform Lab would be removed from the airdrop whitelist. Users are now getting the option of sticking with the old chain or moving forwards with this new chain through airdrop facility.
Terraform Labs will move ahead after the governance vote on this fork proposal succeeds on 18th May.
