Terra Founder Do Kwon Proposes Hard Fork

Do Kwon, Founder of the troubled blockchain platform Terra, plans to revive the network with a new ‘hard fork’  that will help address the design flaws in the ecosystem. The move comes after market volatility and inherent protocol design flaws wiped out much of Terra Luna’s market cap last week.

 

A hard fork is a radical change to a network’s protocol that makes previously invalid blocks and transactions valid, or invalid. A hard fork requires all nodes or users to upgrade to the latest version of the protocol software, according to Investopedia.

 

On May 16, Kwon said his company Terraform Labs will put forth a new governance proposal that will fork the Terra Luna blockchain called Terra (token name LUNA). The new and updated chain will not be linked with the UST, a dollar-pegged stablecoin that collapsed last week.

 

However, the old Terra blockchain will continue to exist with UST even as it switches to Terra Classic (LUNC) token.

 

“The Terra chain as it currently exists should be forked into a new chain without algorithmic stablecoins called ‘Terra’ (token Luna – $LUNA), and the old chain be called ‘Terra Classic’ (token Luna Classic – $LUNC). Both chains will coexist,” Kwon said in a series of tweets on May 16.

 

If all goes according to Kwon’s plan, the new blockchain will be live by May 27.

 

How Will It Happen?

According to Kwon, new LUNA tokens will be airdropped to LUNC “stakers, holders, residual UST holders, and essential app developers” of the Terra Classic blockchain. Terraform Labs (TFL) will also remove its wallet from the whitelist for the airdrop to make Terra a fully community-owned ecosystem, similar to platforms like Ethereum in some ways, Business Insider reported.

 

The supply of LUNC will be capped at one billion, of which 25 percent will be reserved for the community pool. About 5 percent will go to essential developers, while 70 percent will be given to LUNC and UST holders at various snapshots of events in May. The tokens will be subject to vesting conditions.

 

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Will Terra Be Revived by This?

According to the Business Insider report, it is still unclear if the proposal will restore the Luna ecosystem. Luna crypto’s price, which stood at $80 earlier this month, had fallen to nearly 5 cents last week.

 

Luna Foundation Guard, the steward of the ecosystem, also said on May 16 that it had used the vast majority of its cryptocurrency reserves to try to defend UST’s peg during the market sell-off, according to Coin Telegraph.

 

While Changpeng Zhao, CEO of Binance, said he plans to support Terra’s community, others like Zhao are not convinced with Kwon’s proposal either.