Terraform Labs' plans to revive the Terra blockchain network have received approval from the Terra community. With this, the Terra blockchain will be resuscitated on Friday, May 27, but will no longer include the now-crashed US Dollar-pegged stablecoin, TerraUSD (UST). Terraform Labs is the primary promoter of the Terra network, which hosted the beleaguered the UST and Luna tokens.
The old blockchain, called Terra Classic, will operate through the old version of the Luna token, called Luna Classic (LUNC). The new chain, referred to as Terra 2.0, will operate under a new Luna token that will just be called Luna (LUNA). The community has also stated a plan to airdrop LUNA tokens to holders of the crashed UST and LUNC coins, who never sold their holdings.
Under the new plan, 30% of the tokens generated by the new blockchain will be distributed to the community pool. Further, while 35% of the coins will be airdropped (or distributed) to old LUNA (or LUNC) holders, 10% of the new coins will be offered to UST holders. Of the remaining 25%, 15% will be distributed to post-crash LUNA holders, while the remaining 10% will go to post-crash UST holders.
Terraform Labs also stated that going forward, their own wallet and the Luna Foundation Guard wallet are not part of the whitelist to receive the new tokens. A tweet by the blockchain’s official handle said, “The removal of these wallets from the airdrop whitelist will make Terra a fully community-owned chain. We believe this is an important step to empowering our ecosystem.”
Widespread investor sell-off of the LUNA and UST tokens from earlier this month saw both the tokens lose almost the entirety of their value. While LUNA, the governance token of the Terra blockchain, was pegged to UST, the latter was pegged to the value of the US dollar. On paper, the idea behind this was to always prevent the stablecoin from falling below $1 in value.
Terra Classic (LUNC) used complex algorithms and would constantly purge tokens in order to balance out its value.
Going forward, it remains to be seen what the new project brings to the table. Global centralized crypto exchanges, Bybit and Binance, have announced that they will support the new Terra blockchain, but it’s not clear as to when would the new LUNA token return to other centralized exchanges around the world.