Terra Co-Founder Do Kwon Proposes Hard Fork to Save Terra Ecosystem

On Monday, Do Kwon, co-founder of the troubled Terra Luna blockchain, announced a revised plan to restore the ecosystem. Previously, wild market volatility and inherent protocol design flaws wiped out much of the blockchain's market value. Terra Labs will fork the Terra Luna blockchain with a new governance proposal on May 18.

However, the new chain will not be pegged to the TerraUSD (UST) stablecoin. Meanwhile, the old Terra blockchain will continue to exist alongside UST and will be called Terra Classic (LUNC). According to Kwon's plan, if approved, the new LUNA blockchain will go live on May 27.

According to the proposal, new LUNA tokens will be airdropped to LUNC holders, UST holders and key developers of the Terra Classic blockchain. Additionally, Terraform Labs wallet address terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6 will be removed from the airdrop whitelist, making Terra a fully community-owned chain. The proposed supply of LUNC is capped at 1 billion, with 25% going to the community pool, 5% going to the base developers, and 70% going to LUNC and UST holders in various event snapshots in May, depending on distribution conditions.

Earlier today, the ecosystem’s steward, the Luna Foundation Guard, revealed that it had exhausted the vast majority of its cryptocurrency reserves in an attempt to defend the UST peg during the market sell-off. Therefore, the Terra ecosystem is unlikely to save itself without the help of outside capital. Binance CEO Changpeng Zhao stated that he will support Terra's community, but would like to see Terra be more transparent about recent events.

2/ Participating in a dynamic discussion about the best next steps for Terra is inspiring. From the community's feedback and thoughtful suggestions, I would like to offer the following suggestions for a way forward. https://t.co/E13VI8bkLh

A post about our thinking:

— Do Kwon (@stablekwon) May 16, 2022