Terra Backers Vote to Revive Luna

Market Meditations | May 26, 2022

By now, everyone has heard about the $60 billion collapse that happened with the Terra ecosystem. Terra backers have recently voted to revive Luna – but not UST. We are going to summarize parts of the revival plan to get a better sense of how exactly Luna will be coming back.

  • The new Terra chain will be created without the algorithmic stablecoin. The old chain will now be called Terra Classic and the new chain will be Terra.
  • Luna will be airdropped across holders, ‘stakers,’ and developers. The specific token distribution will be 30% to the community pool, 35% to the “pre-attack” Luna holders, 10% to the “pre-attack” UST holders, 10% to the “post-attack” Luna holders, and 15% to the “post-attack” UST holders.
  • Terra will be a full community-owned chain.
  • The network security will be incentivized with token inflation. The target staking rewards they talked about was 7% p.a.
  • Essential app developers will receive an emergency allocation and have access to developer alignment programs and developer mining programs. All of these have specific deadlines as to when their product must be launched. If not launched, they will return funds.

For more detailed information, be sure to read the entire Terra Ecosystem Revival Plan.

Though Luna will be coming back, it was not without disagreement from some. DeFi project Lido Finance voted overwhelmingly against supporting the new Terra blockchain. Less than 5.5% voted in favor of the revival plan that was approved by network validators.