Do Kwon proposes a hard fork of the Terra network to create a new chain not linked with the TerraUSD. However, South Korean authorities begin investigating last week’s Terra incident.
CEO of Terraform Labs Do Kwon has proposed a Terra ecosystem Revival Plan 2. The new proposal entails abandoning the algorithmic stablecoin UST favouring a new chain. On Monday, Kwon suggested this path forward to restore the ecosystem after extreme market volatility and inherent protocol design problems saw its market value bleed.
In the Twitter thread, Do Kwon revealed Terraform Labs would propose a new governance concept to fork the Terra Luna blockchain on May 18. The new Terra chain will have no link with the UST but would keep the luna token as its cryptocurrency.
Meanwhile, the old Terra blockchain will be dubbed Terra Classic (LUNC) and will continue to exist alongside UST. If Kwon’s concept is approved, the new LUNA blockchain will go online on May 27.
Consequently, the Luna Foundation guard(LFG) will distribute the new Luna tokens to LUNC holders, UST holders, and LUNC essential developers under the proposal. It would also make the new chain fully community-own by removing the terraform Labs’ wallet from the airdrop whitelist.
Additionally, the projected LUNC supply is capped at one billion, with 25% going to the community pool. Another 5% will go to essential developers and 70% to LUNC and UST holders in May, subject to vesting rules.
The new proposal is the latest in a series of attempts to help salvage the Luna ecosystem following the UST de-peg debacle. The LFG revealed it had depleted its over 80000 BTC reserve, trying to defend the UST peg during the market selloff. Without external capital, the LFG cannot salvage the Terra chain.
So far, the crypto community has continued to rally in support of the Terra ecosystem. Binance CEO Changpeng Zhao stated that he would support Terra’s community but called for more transparency about recent developments. Ethereum’s coFounder Vitalik Buterin has also suggested Coordinated Sympathy And Relief For UST smallholders.
South Korean Parliament Summon Do Kwon For Hearing
In further emerging developments, reports reveal that the south Koren parliament has summoned Do Kwon for a hearing over the Terra ecosystem collapse. This is part of an ongoing investigation by Seoul authorities of the recent happening to enhance investors’ protection.
Also, the Financial Services Commission (FSC) and Financial Supervisory Service (FSS) of South Korea have requested information from local crypto exchanges. The requested data include Luna and UST transactions, including trading volumes, closing prices and the number of investors.
Furthermore, local Korean exchanges have been asked to provide their countermeasures to the current market crisis and analysis of what caused the crash. Jeong Eun-bo, head of the FSS, has expressed concerns about eroding public trust in crypto. His concerns stem from the roughly $45 billion lost in the UST crash, with over 200,000 South Koreans invested.
Additionally, Jeong underlined the need for cooperation and dialogue with foreign authorities on the need to regulate the crypto industry. However, his sentiments are shared by Ashley Alder, CEO of the Hong Kong Securities and Futures Commission.
According to Alder, Security commissions worldwide are likely to launch a joint crypto regulatory body within 2023. The clamour for regulation has reached a fever peak, with the UK saying it has approved stablecoin laws to be a part of its regulatory framework. This is the first step toward full crypto regulation in the country.
Beyond a national level, the issue of crypto regulation will be discussed at a G7 meeting this week in Germany. The French central bank head Francois Villeroy de Galhau revealed this recently. He said the recent happening was a wake-up call on the urgent need for global regulation of the crypto industry.
Do you think the Terra community would accept the proposed Terra Fork? Let us know your thoughts in the comments below.
Chris is a crypto enthusiast and a firm believer in the blockchain’s ability to create a new financial paradigm. Through writing, Chris hopes to expose the intricacies of this disruptive technology and how it is beneficial to Africans and developing countries. He aims to give readers a rational and unbiased outlook of the industry by equipping them with the necessary information to make enlightened investment decisions.
