The Terra (LUNA) blockchain has seen a miraculous rise and fall over the last few months. But Do Kwon has no plans to stay down, having secured backing from crypto exchanges to help it rebuild. We’re all waiting for Terra’s 2.0 updates. So, what exactly is Terra 2.0?
As the Terra 2.0 testnet goes live, the mainnet launched on May 27 as a part of a revival plan devised by Terraform Labs and co-founder Do Kwon, potentially making the LUNA 2.0 available for trading.
The LUNA token reached new heights until its sister algorithmic stablecoin, TerraUSD (UST), de-pegged from $1 USD a few weeks ago. Terra supporters chose to resurrect the defunct cryptocurrency.
We will walk through Terra 2.0, the new chain that will replace the old chain. What will happen to the Terra blockchain? What does this mean for holders of UST and LUNA tokens?
“Terra is not just UST”.
What is Terra 2.0?
Do Kwon outlined the Terra Ecosystem Revival Plan in a post on Terra’s Research Forum, and it is being updated as they figure out Terra’s future.
Terraform Labs CEO Do Kwon proposed creating Luna (LUNA) 2.0 tokens on a new blockchain, dubbed the “rebirth” plan and tagged as “building the future of money”.
Although the original plan was undergoing an on-chain vote & being amended at the same time, the community voted and accepted the proposal with input from the Terra Builders Alliance (TBA) after Kwon amended it.
The final proposition was approved by 65.5% of those who voted (305,975,278), 20.98% abstained from voting, and 13.20% rejected it by “veto” on May 25th. Additionally, several validators on the Terra blockchain voted no, including blockchain infrastructure companies blockscape, Stake Systems, and DSRV.
By the look of things, the ultimate goal of Terra is to be a community-owned blockchain. The wallet addresses of Terra FormLab and Luna Foundation Guard (LFG) will be removed from the Airdrop whitelist.
According to “Proposal 1623”, the Terra team wants to create a new chain without the algorithmic stablecoin. So they’re effectively preserving the technology behind Layer 1 but not using the stablecoin mechanism that caused the LUNA death spiral.
The old chain is being rebranded as Terra Classic, and the token will be called Luna Classic, or LUNC. The new chain will be called Terra, with the ticker LUNA.
The LUNA token will be airdropped (given away for free) proportionally at a pre-determined percentage to holders across all Luna Classic stakers, holders, residual UST holders, and Terra Classic essential app developers will also be eligible for the LUNA Airdrop.
Is Terra 2.0 a hard fork? Well, Do Kwon essentially wants to reconstitute the Terra blockchain, preserving it while creating a new chain entirely, rather than forking it.
That’s correct! Terra 2.0 will not be a fork. This is the start, the “Genesis” of a new blockchain. What does it all mean? It means that they are starting from scratch, and Terra 2.0 will not share any previous history of the Terra Classic blockchain.
Also, the decentralized applications built on Terra Classic would not exist on the new Terra (LUNA) chain by default. The Dapps must be migrated to the new chain. Surprisingly, many Terra projects have announced that they will re-deploy on the new Terra blockchain. So, if you have a Terra project, you now have a choice.
Suppose, if you are, say, one of the projects on the old Terra chain, such as Astroport or Anchor Protocol, you now have the option of deploying on the new chain or packing up the ship and deploying elsewhere.
Let’s discuss the native token LUNA on the new mainnet Terra 2.0 because it’s one of the hottest burning topics right now.
Who Gets the LUNA 2.0 Token Airdrop & How Much?
LUNA will be airdropped on the Terra 2.0 to eligible LUNC, USTC, and aUST holders. The following information about the airdrop will help you determine if you are eligible.
LUNA airdrop eligibility criteria:
The amount of LUNA you are eligible to receive will be determined by
- The types of tokens you held as an investor on the Terra Classic chain,
- During the period which you held these tokens (based on Pre-Attack and Post-Attack snapshots), and
- The quantity of tokens you held.
Terra 2.0’s native asset, LUNA, will be airdropped to four groups that will be eligible for the reward:
- pre-attack LUNA
- pre-attack aUST
- post-attack LUNA
- post-attack UST
On May 7, a pre-attack snapshot was taken, and on May 27, a post-attack snapshot was taken.
The pre-attack snapshot is taken at Terra Classic block 7544910, and the post-attack snapshot is taken at Terra Classic block 7790000.
How much new LUNA will you get for each category?
- Pre-attack LUNA – 1: ~1.1
- Pre-attack aUST – 1: 0.033
- Post-attack LUNA – 1: 0.000015
- Post-attack UST – 1: 0.013
What is worth noting about the Airdrop details?
Prior to the collapse of UST, investors who owned fewer than 10,000 LUNA (now LUNC) or deposited UST in Anchor, along with post-attack users with any amount of LUNA or UST, will get LUNA tokens on a regular basis to avoid immediate selling.
Over 30% of their tokens would be unlocked right away, with the remaining 70% released over the course of two years, with a six-month cliff in the middle.
It does not end here, though. The “rebirth” plan includes that the Airdrop will take place in a “bonded state”, so transfers will be available after a 21-day unbonding period.
At the very least, Terra 2.0 will be the heart of the wider Cosmos ecosystem, according to Orbital Command, a validator who is “dedicated to educating the Terra LUNA community”. Users from Cosmos will transfer their assets to Terra 2.0 for clustering, options, refracting, and lending/borrowing.
Terra 2.0 is the Terra team’s bold revival strategy, but whether it will pay off is debatable. Since the crash, Terra’s reputation has taken a hit, and many people are wary of the network.
There are definitely some members of the Terra community who are vocal supporters of any revival efforts. But, with lawsuits and investigations pending, it’s questionable whether Terra will ever reach the heights of its original network.
Frequently Asked Questions:
- When will you receive the airdrop?
The first airdrop will happen on the day of the Genesis of the new blockchain, i.e., May 27th, 2022.
- Which Centralized Exchanges (CEXs) are supporting the Terra 2.0 re-deployment?
The following CEXs will be supportive in the airdrop at Genesis of Terra 2.0:
- Which Terra Classic projects & protocols are supporting the Terra 2.0 re-deployment?
During press time, here is the non-exhaustive list of the projects in support of the new Terra chain: