One of the largest crashes in cryptocurrency history happened earlier this month. Now, Do Kwon and his crew have finally come up with their Terra Ecosystem revival plan. According to the announcement, Terra 2.0, a new chain, will be launched on Friday, May 27.
What led to the creation of Terra 2.0?
The algorithmic stablecoin UST developed on top of the Terra protocol and a driving force behind its entire ecosystem lost its peg on May 9. It traded within the $0.30 zone; 70% lesser than the expected $1.
Because of the way the algorithm works, traders can redeem 1 UST for $1 worth of $LUNA tokens. The intent is to eradicate the UST and limit the supply to improve the value. However, UST never got close to $1 due to the high selling pressure.
This enabled dealers to print LUNA in large quantities, resulting in a tremendous supply of over 6 trillion LUNA in a few days. This oddly fast supply growth led to the unavoidable price plummet to $0.
Billions of dollars were wiped out, eradicating the entire Terra ecosystem — an event that will forever live on as the worst altcoin crash to date.
New Terra Chain Sans Algorithmic Stablecoin
Terra 2.0 will “effectively create a new Terra chain without the algorithmic stablecoin,” according to Terra.
3/ It will effectively create a new Terra chain without the algorithmic stablecoin. The old chain will be called Terra Classic (token: $LUNC), and the new chain will be called Terra (token: $LUNA). The chain upgrade will commence a few hours after the Launch snapshot.
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 25, 2022
With the Luna token, the new Terra will basically build a new blockchain. Luna 2.0 will replace the old Luna, entirely severing links with the unsuccessful stablecoin.
However, the old Luna will not completely vanish; rather, it will coexist with the new and enhanced Luna 2.0. Part of the 1 billion new tokens will be distributed to holders of the old Luna, now dubbed Classic, and UST.
Terra will become entirely community-owned.
Crypto Exchanges Extend Support for New Terra
Some of the most well-known cryptocurrency exchanges have expressed their support for the Terra 2.0 launch. Huobi stated it would support the launch, while OKX said it would support the airdrop of the new LUNA coins.
The world’s largest crypto exchange Binance also extended support for a “reboot”: a vote within the Terra community called “Rebirth Terra Network.”
LUNA Airdrop: How Much to Expect
One of the most talked-about subjects in the upcoming LUNA airdrop and how it will be allocated to LUNC token holders. The distribution and vesting of airdropped LUNA are determined by the type and quantity of tokens in the wallet, as well as the snapshot it is in.
To summarize, the distribution looks like this:
Pre-attack LUNA holders: 35%
Pre-attack UST holders – 10%
Post-attack LUNA holders – 10%
Post-attack UST holders – 15%.
Community pool – 30%
Pre-aAttack users with fewer than 10k LUNA (including staking derivatives) or deposited UST in Anchor will receive 30% of the LUNA airdrop immediately, and Post-aAttack users with any number of LUNA (including staking derivatives), UST, or both.
Additionally, Terraform Labs’ (TFL) wallet will be removed from the airdrop’s whitelist, with the goal of making “Terra a fully community-owned chain.”
Each coin will have a unique initial unlock and vesting period based on a set of conditions. You can read more about it here.