Do Kwon Says Terra Could Fork Into Two Blockchains
The Terra leader's new revival plan proposes the creation of Terra Classic.
- Terraform Labs CEO Do Kwon has suggested forking Terra to create two blockchains: Terra and Terra Classic.
- The proposal is a response to TerraUSD's (UST)'s recent failure; only the classic chain will have the UST stablecoin.
- The new, non-classic chain will instead promote essential development and provide incentives to participants.
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Terraform Labs CEO Do Kwon has announced a second revival plan for the failing Terra ecosystem in a Twitter thread.
Do Kwon Announces Revival Plan
Do Kwon is not ready to give up yet.
In his announcement, Kwon announced plans to pivot from focusing on the failing TerraUSD stablecoin (UST) to promoting development within Terra’s overall development ecosystem.
“The Terra ecosystem and its community are worth preserving,” Kwon wrote, adding that “Terra is more than $UST.”
The new plan means that Terra will be forked into two chains, Terra and Terra Classic. Those chains will host the Luna (LUNA) and Luna Classic (LUNC) cryptocurrencies respectively. Only the classic chain will have the algorithmic stablecoin TerraUSD.
The plan will also airdrop new LUNA tokens to LUNC stakers and holders, as well as residual UST holders and essential app developers. Terra will be a community-owned chain due to the fact that the Terraform Labs will not be included in airdrops.
Based on the proposal itself, a governance vote will be held on May 18. If it is successful, the new chain could be launched by May 27.
Though there is no data on how many stakeholders support the proposal, comments suggest many are critical of the plan and that most support an earlier plan involving a token burn.
Kwon compared TerraUSD’s failure to Ethereum’s DAO hack, calling the opportunity a “chance to rise up anew from the ashes.” That hack similarly led Ethereum to split into Ethereum Classic in 2016.
Terra Lost Its Peg One Week Ago
The TerraUSD stablecoin (UST) began to depeg from its $1.00 target on Sunday, May 8. The asset lost its peg with the dollar further on May 9, when its price fell below $0.95.
Various actions to protect the coin’s value were taken in the meantime. On May 9, the Luna Foundation Guard announced it would deploy $1.5 billion to preserve the stablecoin’s value.
The project announced emergency plans on May 12, which involved coin burns. Kwon announced other plans to revive the network on Friday, May 13, which involved issuing new tokens.
Earlier today, the Luna Foundation Guard announced plans to compensate UST users, paying out to the smallest holders first. The group is still exploring compensation methods.
While not all of the above plans have been fully enacted, those that have been carried out have not succeeded in raising the stablecoin’s price. UST is currently worth just $0.10.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.