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Do Kwon proposes Terra Hard Fork to save the ecosystem

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On Monday, Do Kwon, co-founder of the troubled Terra Luna blockchain, announced a revised ecosystem recovery plan after a combination of significant market volatility and inherent flaws in the protocol design wiped out much of the blockchain’s market cap. As communicated by Kwon, on May 18, Terraform Labs will present a new governance proposal to fork the Terra Luna blockchain called Terra (token name: LUNA).

However, the new chain will not be affiliated with the TerraUSD (UST) stablecoin. In the meantime, the old Terra blockchain will continue to exist with UST and will be called Terra Classic (LUNC). According to Kwon’s plan, the new LUNA blockchain will go live on May 27 if accepted.

As part of the proposal, new LUNA tokens will be air-dropped to LUNC holders, UST holders, and key developers of the Terra Classic blockchain. Additionally, the Terraform Labs wallet at address terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6 will be removed from the airdrop whitelist, making Terra a fully community-owned chain. The proposed offering of LUNC is capped at 1 billion, with 25% going to the community pool, 5% to key developers, and 70% to LUNC and UST holders at various snapshots of events throughout May, subject to vesting conditions.

Earlier today, the Luna Foundation Guard, the custodian of the ecosystem, announced that it has used an overwhelming portion of its cryptocurrency reserves to defend UST’s peg during the market sell-off. Therefore, the Terra ecosystem is unlikely to be able to save itself without the help of outside capital. Changpeng Zhao, CEO of Binance, said that he was supportive of the Terra community but would like more transparency from the company regarding recent events.