Do Kwon wants to fork the Terra blockchain as part of revival plan

Cryptocurrency • May 16, 2022, 3:03PM EDT
The Block

Terraform Labs CEO and co-founder Do Kwon has formally proposed forking the Terra network into a new chain. 

Kwon circulated a new proposal today in a post on a forum for Terra discussion in the wake of the collapse of Terra-based assets. It adds to his initial revival plan, posted last week, which amounted to a restart of the Terra blockchain. That initial proposal would create one billion tokens to distribute among stakeholders to incentivize them to remain and rebuild.

"$UST peg failure is Terra’s DAO hack moment - a chance to rise up anew from the ashes," said Kwon in his post.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

This latest addition proposes to fork the Terra chain into a new "Terra" with token "Luna" while the old chain would become "Terra Classic" and the original Luna tokens would become "Luna Classic" (LUNC). The new Luna would be airdropped to Luna Classic holders, stakers, Terra holders and app developers of Terra Classic. The intention is for the chain to be "community-owned" and target a 7% inflation rate through staking rewards.

The creation of one billion Luna is still part of the proposal. Kwon proposed that a quarter of those tokens would go to a community pool on the forked chain controlled by stake governance, 5% to developers, 35% to wallets that held Luna prior to the attack, 10% to Luna holders at the launch of the new chain, and 25% to UST holders on a vesting schedule. 

The proposal will be put up for governance vote on May 18th Asia Time.

Kwon took to Twitter to explain why he's advocating for this path forward, saying the developer talent pool is "broader and deeper on Terra than most ecosystems," and that "Terra’s blockchain is incredibly robust, as attested to by recent events."

About Author

Aislinn Keely is a reporter on The Block's policy team holding down the legal beat. She covers court decisions, bankruptcies, regulatory actions and other key moments in the legal sphere, putting them in context for the wider crypto industry. Before The Block, she lent her voice to the NPR affiliate WFUV and helmed Fordham University's student newspaper. Send tips or thoughts on all things policy and legal to [email protected] or follow her on Twitter for updates @AislinnKeely.