– Terraform Labs’ “Terra Ecosystem Revival Plan 2” met with a bearish response, LUNA price plunged 18.9%.
– The hard fork proposed by Do Kwon would create two versions of the token, LUNA Classic and LUNA Core – the original one.
– LUNC holders will receive LUNA tokens, in a fork inspired by Ethereum’s 2016 DAO hack.
– Leading crypto analysts divided on Terra’s LUNA recovery prospects.
Terraform Labs’ move to revive native token LUNA without stablecoin UST is similar to Ethereum’s hard fork of 2016.The algorithmic stablecoin UST will cease to exist once the revival plan is implemented since Terraform Labs CEO Do Kwon believes LUNA is more than TerraUSD.
Also read: Can Ethereum price hold as Vitalik Buterin sells 30,000 ETH?
Terra’s LUNA could recover from crash with proposed hard fork
In an attempt to promote LUNA’s recovery and to compensate token holders, the co-creator of Terra, Do Kwon, put forward “ Terra Ecosystem Revival Plan 2 .” Still, LUNA continued to shed its value, with the 24-hour trading volume exceeding $2 billion.The Terraform Labs CEO explained the logic behind the new proposal to fork LUNA.The Terra ecosystem and its hundreds of developers, large number of holders and strong brand name will be preserved through the implementation of the proposal.
Terra fork to set two parallel blockchains: LUNA Classic and LUNA Core
Do Kwon has recommended retaining both blockchains, the original being LUNA Classic (LUNC) and a parallel one being LUNA, based on snapshots taken from May 7, 2022.The total supply of the new LUNA Core chain would be capped at 1 billion tokens following the tokenomics detailed below:
– 25% – Community pool, controlled by staked governance
– 1% – Essential Developers emergency allocation.
No lockup
– 4% – Essential developers (1 year cliff, 4 year vesting thereafter, granted after launch traction)
– 35% – All bonded / unbonded Luna, minus TFL at “Pre-attack” snapshotFor wallets with < 1M Luna: 1 year cliff, 2 year vesting thereafterFor wallets with > 1M Luna: 1 year cliff, 4 year vesting thereafter
– 10% – Luna holders (staking derivatives included) at the “Launch” snapshot – 10% unlocked at genesis, 90% vested over 2 years thereafter
– 25% – UST holders at the “Launch” snapshot – 10% unlocked at genesis, rest vested over 2 years thereafter
The revival plan does not have provisions for traders that sold LUNA during the crash, and holders that were locked out of their UST tokens (in exchange wallets) due to the exchange’s decision to halt trading.Therefore, UST holders from exchanges like Coinbase have criticized Terra’s move.The fork could be a milestone event for LUNA and UST holders and aid the token’s recovery.The hard fork proposal will be voted in the Terra community on May 18, 2022.
Do Kwon said that “Terra is more than UST” and making it a completely community-owned chain through a fork is the best way forward for the project, its community of developers and token holders.
1/ Terra is more than — Do Kwon (@stablekwon) [$UST] [May 16, 2022]
Terra hard fork inspired on Ethereum’s DAO hack
Proponents have noted the likeness between Terra’s proposed fork and Ethereum’s hard fork of 2016, the famous DAO hack.Back then, Ethereum (ETH) was the forked blockchain, and Ethereum Classic (ETC) was the core blockchain.
The Ethereum hard fork was a bailout to rescue the blockchain and its stakeholders from the negative impact of stolen funds, to the tune of $50 million.Since the hard fork, the Ethereum network has witnessed massive growth.Proponents believe the upcoming LUNA hard fork represents a bailout for the Terra ecosystem after the coordinated attack against its algorithmic stablecoin UST.
Experts split on Terra’s LUNA price recovery potential
Glauber Contessoto, a crypto leading analyst, believes purchasing LUNA at this point is “a high-risk transaction” as the Luna Foundation Guard council has already utilized nearly $3 billion of its reserves trying to save UST and the new revival plan does away with TerraUSD entirely.
@Hayess5178, another leading crypto analyst and developer, believes LUNA price could recoup some of its losses.LUNA price is attempting to break out, and a close above hourly resistance at $0.000207 could confirm an uptrend.
— Simon Hayes (@Hayess5178) — Simon Hayes (@Hayess5178) [$LUNA] [@terra_money]
Attempting to break out.Lets see if it can close the hourly above resistance around $0.000207.
Hopefully turn resistance in to support and possibly continue up.
[$ust] [#luna] [#lunaterra] [#LUNAtic] [#bitcoin] [#cryptocurrency] [pic.twitter.com/WlFYPT7UIz] [May 17, 2022]
Is it time to buy-the-dip on cryptocurrencies?
Terra’s LUNA collapse brought the whole cryptocurrency market down, with Bitcoin price and all the altcoins suffering heavy losses.This might have presented a good buy-the-dip opportunity, is it time to go long on Bitcoin?
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