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Terraform Labs’ decision to resurrect the native token LUNA without the use of the stablecoin UST is akin to Ethereum’s 2016 hard fork. Terraform Labs CEO Do Kwon feels LUNA is greater than TerraUSD, so the algorithmic stablecoin UST will be phased out once the revival plan is implemented.
Do Kwon, the co-creator of Terra, proposed “Terra Ecosystem Revival Plan 2” in an attempt to encourage LUNA’s recovery and reward token holders. LUNA continues to lose value, with a 24-hour trading volume of more than $2 billion.
The logic behind the latest proposal to fork LUNA was stated by Terraform Labs’ CEO. Through the adoption of the proposal, the Terra ecosystem, including its hundreds of developers, a vast number of holders, and strong brand reputation, will be retained.
LUNA Classic and LUNA Core
Based on snapshots made on May 7, 2022, Do Kwon has advised keeping both blockchains, the original LUNA Classic (LUNC), and a parallel LUNA. Following the tokenomics, the total supply of the new LUNA Core chain would be capped at 1 billion tokens.
Traders who sold LUNA during the crash and holders who were locked out of their UST tokens (in exchange wallets) owing to the exchange’s decision to cease trading are not covered by the resurrection plan. Terra’s move has been condemned by UST holders from exchanges such as Coinbase. For LUNA and UST holders, the fork might represent a watershed moment in the token’s recovery. On May 18, 2022, the Terra community will vote on the hard fork proposal.
Do Kwon stated that “Terra is more than UST,” and that forking the chain to make it totally community-owned is the best route forward for the project, its developers, and token holders.
1/ Terra is more than $UST
— Do Kwon(@stablekwon) May 16, 2022
Terra’s intended fork has been compared to Ethereum’s 2016 hard fork, which resulted in the infamous DAO hack. Ethereum Classic (ETC) was the core blockchain at the time, and Ethereum (ETH) was the forked blockchain. The Ethereum hard fork was a $50 million bailout to save the blockchain and its stakeholders from the harmful effects of stolen funds.
The Ethereum network has grown dramatically since the hard fork. After the coordinated attack against Terra’s algorithmic stablecoin UST, supporters hope the imminent LUNA hard fork will be a lifeline for the Terra ecosystem.
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