The price of the Terra network’s native LUNA token and the failed stablecoin terraUSD (UST) jumped in the market on Wednesday, after a revival plan for the network officially passed a vote, with 65% voting in favor of the plan. A new Terra blockchain is now expected to launch this Friday, May 27th.
As of Wednesday at 14:45 UTC, LUNA was up nearly 32% for the past 24 hours to a price of USD 0.000199. At the same time, UST – Terra’s failed algorithmic stablecoin – was up 61% over the same time period to USD 0.1067.
“Terra 2.0 is coming. With overwhelming support, the Terra ecosystem has voted to pass Proposal 1623, calling for the genesis of a new blockchain and the preservation of our community,” Terra’s Twitter account said after the vote had passed.
The plan to revive the embattled blockchain was conceived by Terra co-founder Do Kwon, with the key aspect being the creation of a new blockchain with a new governance token that will be distributed to users affected by the collapse of Terra and its terraUSD (UST) stablecoin.
The exact breakdown of for the distribution of the new LUNA token was also shared by Terra’s Twitter account today:
6/ Token distribution details can be found in the governance proposal, but to summarize:
● Community pool: 30%
● Pre-attack $LUNA holders: 35%
● Pre-attack aUST holders: 10%
● Post-attack $LUNA holders: 10%
● Post-attack $UST holders: 15%— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 25, 2022
With the plan now getting the green light from a majority of network validators, the new Terra network is expected to launch Friday this week, according to the timeline on Do Kwon’s Terra revival plan.
The old chain will from then on be known as Terra Classic with its token Luna Classic (LUNC), while the new chain will simply be known as Terra with its governance token LUNA. The new Terra chain will be created without an algorithmic stablecoin, according to the official plan.
In the update today, Terra also said that it is working closely with exchanges, including Binance, Bybit “and many others,” to ensure users who held tokens on exchanges will be able to receive the upcoming airdrop.
Meanwhile, Binance issued a statement on its own today, saying it is “working closely with the Terra team on the recovery plan, aiming to provide impacted users on Binance with the best possible treatment.”
A similar sounding statement was also published by the major exchange Huobi, saying it “supports the launch of LUNA 2.0 on May 27.”
Notably, the new version of Terra will not be supported by Lido (LDO), a liquid staking provider that is particularly popular among Ethereum (ETH) users. “Following a discussion on the launch of Lido on Terra v2, the Lido DAO has voted to NOT support the Terra reboot,” the Lido team wrote on Twitter on Wednesday.
According to Lido’s voting page, almost 95% of LDO tokens voted against supporting the revival plan.
Reacting to the news that Terra is now moving forward with a new blockchain, several members of the crypto community voiced skepticism. While one user suggested exchanges should “refuse to list” a new token, others called it “wishful thinking” that new money will be invested in another Terra blockchain.
Lack of transparency still a problem
Despite Terra’s revival plan now passing its vote, it appears that not all of Terra’s problems are over yet.
Reporting on the case on Tuesday, the Wall Street Journal wrote that an “inherent lack of transparency” has made many investors worried about how the reserves that backed up UST were spent as the Terra Foundation Guard attempted to defend the stablecoin’s peg.
“We can see the movements on the blockchain, we can see the funds move to these large centralized services. We don’t know the motivations behind these transfers and whether they were transferring them to another actor or whether they were transferring the funds to their own accounts on these exchanges,” Tom Robinson, co-founder of the blockchain analytics firm Elliptic was quoted as saying.
Source: Cryptonews
