“$UST peg failure is Terra’s DAO hack moment,” the Terraform Labs CEO wrote, “a chance to rise up anew from the ashes.”
Terraform Labs CEO Do Kwon is out with a new “Revival Plan” to save the Terra ecosystem in the wake of last week’s stable coin meltdown. His new slogan: “Terra is more than UST.”
Calling the $40 billion implosion “a chance to rise up anew from the ashes,” Kwon said that “the ecosystem and its community are worth preserving” as he pitched the second take revival plan as a “living document.”
In Monday’s post and an accompanying Twitter thread, Kwon proposed forking Terra into a new chain sans terra USD (UST), the algorithmic stable coin whose depegging crushed the entire ecosystem, the LUNA token included. Holders of LUNA on the “Classic” chain (the existing chain) would receive an airdrop of the new chain’s token under the plan. The old chain will continue to operate using the newly renamed luna classic (LUNC) token.
Kwon said the new chain will be “fully community owned,” and Terraform Labs – Kwon’s company and the creators of Terra – will not be eligible to receive funds in the initial token disbursement.
The plan will go into effect if it’s voted through by token holders. Kwon promised voting would begin on May 18. According to his proposed timeline, the new network launch could come as soon as May 27.
In what may have marked the largest token collapse in crypto history, Terra’s $40 billion stable coin juggernaut crashed last week. Terra’s UST stable coin, which is supposed to stay “pegged” to the price of the dollar, plummeted below 10 cents. LUNA, which UST’s “algorithm” uses to help prop up the stable coin’s dollar peg, dropped from $80 to below 1 cent amid the turmoil.
In a tweet Monday, the Luna Foundation Guard, stewards of Terra’s vast bitcoin (BTC) reserves, explained that it sold off virtually all of its over-2 billion dollars worth of bitcoin in an ultimately failed attempt to defend UST’s peg. The announcement dashed any hope that Terra might be able to use the reserves to substantially compensate investors.
Monday’s announcement from Kwon followed an original “Revival Plan” he proposed last week. The earlier plan, while light on specifics, also proposed handing ownership of Terra over to its community.
Compared to the earlier plan, the newer one places a larger percentage of the forked chain’s initial token distribution (25% versus 10%) into a “Community Pool” responsible for funding future development. The new plan also gives 5% of the tokens to “essential developers” – a group not mentioned in the original proposal.
This will be a living document to coordinate the fork with the community. Details are subject to change.
Terraform Labs will put this proposal up for a governance vote on 5/18 Asia time. If passed, it will coordinate the network fork pursuant to the “Timeline” below.
Special thanks to everyone that submitted great ideas on Agora and the “Rebuilding Terra” group.
Motivation
Terra is more than $UST.
While UST has been the central narrative of Terra’s growth story over the last year, the distribution of UST has led to the development of one of the strongest developer ecosystems in crypto.
The Terra ecosystem and its community are worth preserving.
$UST peg failure is Terra’s DAO hack moment – a chance to rise up anew from the ashes.
Summary
Essential app developer program
There are essential apps that must exist in any web3 ecosystem to be viable:
… and others.
Essential app developers committing to launch on Terra will receive:
Essential app developers looking to join should signal public support for the fork on Twitter and social channels, and coordinate with the community multisig
Token Distribution
1,000,000,000 Luna tokens
All tokens locked or vesting is staked at genesis, and must be unbonded to become liquid.
Technical details
oracle
treasury
market
Roles & responsibilities
Timeline
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