Terraform Labs founder Do Kwon has a new plan to save Terra and Luna. Basically he proposes a hard fork. How should it work?
Do Kwon is probably the most hated person in the crypto community for the last week.
He stands behind the biggest crypto crash in history. His LUNA token just vanishes from $85 to fractions of a cent in days. And abruptly dropped UST stablecoin undermined trust in the market in general.
The community is now discussing whether Terra was the greatest scam project. Or was it just the risky tokenomic.
Anyway, even Dogecoin co-founder Billy Markus said Do Kwon should leave the crypto industry forever.
But this hero of the occasion came up with a new plan. Do Kwon wants to recover Terra.
Do Kwon plans to save Terra
At the time of writing, ‘stablecoin’ UST is trading at 15 cents and LUNA price is like $0,0001. Now, Do Kwon claims that a new hard fork can save the tokens.
Recently he announced a ‘revised plan to restore the ecosystem’. The new governance proposal to fork the Terra Luna blockchain will be put on the table on May 18. “The Terra community must reconstitute the chain to preserve the community and the developer ecosystem,” he said on Terra’s research forum.
The new chain would go apart from the TerraUSD (UST) stablecoin. The old Terra blockchain will remain to maintain UST. But with the new name Terra Classic (LUNC). The fork idea itself is to airdrop new LUNA tokens to the new LUNC holders, UST holders. And essential developers of the Terra Classic blockchain, of course.
Kwon also promises to remove the ill-fated wallet with the address terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6 from the whitelist for the airdrop, and make Terra a ‘fully community-owned chain’.
LUNC proposed supply is 1 billion, with 25% going to the community pool, 5% to essential developers, and 70% to LUNC and UST holders at various events in May.
If adopted by the community, the new LUNA blockchain will go live on May 27.
And that is basically how Do Kwon proposes to save Terra.
We don’t trust you, Kwon
Before the initial voting on the hard fork, some crypto tops harshly criticized the LUNC idea.
In particular, Binance CEO Changpeng Zhao said that ‘forking does not give the new fork any value’ and that’s ‘wishful thinking’.
“One cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges),” Zhao said, noting that the new version of LUNA ‘based on a snapshot of their holdings’ won’t succeed.
Binance CEO also underlined that reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin. Zhao expressed his support to Terra’s community though. But he would like to see ‘more transparency from the entity’.
Meanwhile, Ethereum co-founder Vitalik Buterin has praised a totally different proposal to reimburse small UST holders. Payout of between $1 billion to $1.5 billion can ‘greatly improve general morale and sentiment’, he thinks. Do Kwon wouldn’t save Terra this way, but it would help to bring relief to its users.
“Coordinated sympathy and relief for the average UST smallholder who got told something dumb about ‘20% interest rates on the US dollar’ by an influencer, personal responsibility and SFYL [sorry for your loss] for the wealthy,” – Buterin noted.
So it seems like only the actual assets reimbursement can revive the trust in Terra. At least you should be very enthusiastic to believe the new LUNC hard fork could make LUNA price great again. So the story of Do Kwon and Terra is far from over. At least, yet.