Do Kwon's proposal will create a new network without a stablecoin called Terra, while leaving the old network intact, which he will call Terra Classic.
Last week, Terra's ecosystem collapsed after UST, the protocol's algorithmic stablecoin, lost the parity with the dollarIn an attempt to maintain the USD peg, Terra sold all the Bitcoin it held in reserve and minted more LUNA, causing the ecosystem to crash and the network to come to a standstill for several hours.
Shortly after, Do Kwon, CEO of Terra, appeared on Twitter to lay out a plan with which save the stablecoin and the network, although this did not come to fruition. Later, other figures such as Vitalik Buterin, founder of Ethereum, or Changpeng Zhao, CEO of Binance, have appeared to offer advice on how to mitigate investors' losses.
Lack of consensus among different investors
Despite all these attempts to help, TerraForm Labs remained silent throughout. However, yesterday Do Kwon himself posted a lengthy Twitter thread, with the title, “Terra is more than $UST”, in which he proposed a solution to save his blockchain.
In his thread, Kwon thanks the community for their understanding and collaboration, stating that it has been a unique experience to receive so much feedback from users. In recent days, the founder of Terra has come to the conclusion that his community trusts the project, that it has the largest pool of talent in the crypto world and that Its blockchain is very robust.
However, due to the disparate interests of investors (LUNA holders, developers, UST holders...) in the ecosystem, it has been impossible to reach a consensus on How to fix Terra problems.
Do Kwon says that it would be critical for the future adoption of cryptocurrencies and for the future of the sector if the Terra blockchain remains in its current state of entropy. Therefore, Kwon has decided to take the reins of the situation and propose a solution: a fork that divides the network in two.
Terra and Terra Classic, Do Kwon's solution for your network
Do Kwon has filed a governance proposal on the official Terra forum to create a fork that splits the blockchain in two, called “Terra Ecosystem Revival Plan 2”.
On the one hand, a new blockchain will be created, in which there will be no algorithmic stablecoin, which will be called Terra and whose token will remain $LUNA. On the other hand, the old blockchain will remain, called Terra Classic, whose token will become $LUNC. If Do Kwon's proposal is approved, both chains will exist in parallel.
The CEO of Terra has also pointed out that the new $LUNA tokens will be distributed via airdrop to holders and those who have $LUNC staked, to residual UST holders and also to the developers of the ecosystem. In this sense, Do Kwon assures that the wallet addresses of the members of TerraForm Labs will not participate in this airdrop, so that the blockchain is completely in the hands of the community.
Finally, the CEO of Terra has called on developers and the community to participate in the governance proposal that will be opened on May 18. If the proposal goes ahead, the TerraForm Labs team will coordinate with the validation nodes to Activate the fork next Friday, May 27th.
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