As the Terra ecosystem continues to fall, Terraform Labs announces it will hold a governance vote on May 18 to decide on hard forking LUNA as a recovery solution. This decision was announced by Do Kwon, co-founder of Terra-LUNA blockchain who suggested that a creating new chain with LUNA can be a good recovery plan to save the ecosystem.
TerraUSD (UST) and LUNA have been facing the crypto history’s biggest sell-out following the crypto crash and protocol design flaws that affect almost every cryptocurrency on the global market. Although other cryptocurrencies are able to recover from this crisis, Terra crypto tokens gave up midway.
UST, which was once a thriving stablecoin is now below $1 and refuses to maintain its previous position despite various attempts. Similarly, with stablecoin being unstable, LUNA has dropped to the lowest of the lows, causing anxiety among all LUNA traders.
Do Kwon announced that Terra is in recovery mode after the blockchain halted its operations and the coins left on various crypto exchange platforms.
The co-founder of the Terra-LUNA ecosystem Do Kwon recently came on Twitter to announce that Terraform Labs is considering hard fork LUNA as a solution to save its ecosystem.
According to him, if the hard fork of LUNA happens, the previous blockchain will continue to exist as Terra Classic (LUNC) to avoid any losses to traders. Furthermore, the UST will not be linked as stablecoin in the new chain. This means Terra might abandon UST in the old blockchain and introduce a new chain.
According to the CoinTelegraph article by technology writer, Zhiyuan Sun, this recovery plan hasn’t been implemented yet as Terraform will first hold a governance vote in its DAO community to gain the members’ trust back and ensure that the decision it will make is approved by the majority.
If the decision passes through a governance vote, Terra will airdrop new LUNA tokens to previous holders and essential developers of the Terra Classic blockchain, now known as the LUNC holders.
The LUNC pool is will be capped at $1 billion from which 70% will go to LUNC and UST holders gathered from the snapshots of May, the remaining 25% will go to the community, and 5% to classic Terra developers. By dividing this airdrop, Terraform Labs hopes to recover its currently halted ecosystem.
Prior to Do Kwon’s announcement, Luna Foundation Guard announced that it has used the majority of its Bitcoin reserves to recover UST’s dollar peg; however, the need for external capital still remains. Thus, Do Kwon is adamant about hard forking LUNA and creating a new chain as a solution.
Following Do Kwon’s announcement, the CEO of Binance Changpeng Zhao disagreed with Terra’s plan to hard fork LUNA; he suggests buy out and burning as an effective strategy to recover LUNA.
Whatever final decision Do Kwon and Terraform Labs makes, LUNA traders are anxiously waiting for the token to rise and recover from the growing losses as the crypto market continues to see bearish patterns.
See the detailed Terra-LUNA ecosystem recovery plan by Do Kwon here.