- Terra (LUNA-USD) developers are considering a hard fork to give new life to the LUNA crypto
- Founder Do Kwon says the fork can appease the desires of DeFi users and Terra developers
- A new chain will forgo algorithmic stablecoins, while the old Terra network will continue to embrace them
It looks like the Terra experience could be split into two separate ecosystems soon. As least, that is the hope of Terra founder Do Kwon. This afternoon, Kwon shared an idea about how to revamp the LUNA crypto. Noticing that the network’s crash last week has led to a diversity of opinions from different users, Kwon and other Terra developers are looking at a hard fork to assuage everybody.
The Terra network is the most famous example in recent years of a major project falling into complete disarray. Things started as the network’s native stablecoin, TerraUSD (UST-USD), lost control of its dollar peg. It has spiraled out of control over the past week with the token dropping to just 11 cents. The LUNA crypto has seen its own spectacular failure as well. After hitting a $119 all-time high, the coin fell over 99.99%. It is trading now for just a fraction of 1 cent.
In the aftermath of this decline, Terra has faced great criticism. Some community members believe that TerraUSD, the algorithmic stablecoin, is the real problem. They believe that if TerraUSD had a 1-for-1 backing with fiat currencies or other crypto assets, this plunge would not have happened.
LUNA Crypto Could See New Life on Terra 2.0 Network
Developers appear to be aware of these various opinions and theories for what caused the plunge. Today, new plans to revive the Terra ecosystem reflect an attempt at compromise.
Do Kwon published a long Twitter thread this afternoon, addressing the different opinions. As a way to bridge various proposals into one solution, Kwon called for a hard fork of the Terra network.
1/ Terra is more than $UST
— Do Kwon 🌕 (@stablekwon) May 16, 2022
Kwon proposed that the network fork from its current state into two ecosystems, Terra Classic and Terra 2.0. Terra Classic will favor users; this chain will embrace stablecoins and seigniorage just as Terra did before the crash. Meanwhile, the hard-forked Terra 2.0 chain would favor developers, prioritizing token drops for developers who need things like liquidity for their platforms.
6/ The Terra chain as it currently exists should be forked into a new chain without algorithmic stablecoins called “Terra” (token Luna – $LUNA), and the old chain be called “Terra Classic” (token Luna Classic – $LUNC). Both chains will coexist.
— Do Kwon 🌕 (@stablekwon) May 16, 2022
Developers will be publishing the formal proposal for a hard fork this evening. If approved by LUNA holders, Kwon says the network will begin coordinating the fork with validators before the end of May.
11/ TFL will be initiating a governance proposal for the network fork in the next few hours – if the proposal passes, then it will coordinate the fork with validators next Friday 05/27.
— Do Kwon 🌕 (@stablekwon) May 16, 2022
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
