Terraform Labs’ native token LUNA and stablecoin UST lost 99.9% of their market value within a matter of a few hours after the UST peg was broken.
Later on, addressing the issue, Do Kwon the founder of Terra Chain and the CEO of Terraform Labs suggested a reboot plan that will incentivize the node validators and token holders with new coin issuance.
However, his proposal received severe backlash from the Terra token holders. During a recent voting session Do Kwon came forward once again and amended his proposal to reinstate the market value of the Terra Chain.
He joined the community in the middle of the voting process and talked about how this plan should be implemented to salvage the remaining value of the Terra Blockchain and recover losses for the LUNA investors.
Do Kwon’s Rebirth Plan
The new revival plan shared by Do Kwon is unique in the sense that it talks about the rebirth of the Terra blockchain rather than rebooting the network. He also shared the idea of reissuing a new token that will be named the LUNA 2.0 token.
According to his amended proposal, the new Terra Chain will have new distribution parameters added by Do Kwon himself. At present, when the previous community plan was still undergoing the voting process, the CEO and founder shared the new proposal, which can only go forward after getting positive feedback from community voters.
The new proposal suggested making a change to the LUNA 2.0 distribution method that will include the UST holders with staking positions before the de-peg incident. On-chain metrics reveal that the dominance of UST stakes makes up 15% to 20% of the distribution share.
On the other hand, Kwon also changed the distribution percentages for LUNA 2.0 holders from 15% to 30% taking up the initial token release. Meanwhile, he also made a 70% distribution quota for investors with a two-year vesting period. It is very uncommon for a blockchain member to make amendments to a proposal while the voting is still in progress.
Some LUNA community members like FatMan suggest that such practices raise questions over the validity of the Terra Chain. The anonymous Terra contributor and validator further claimed that the new proposal would require another voting session to see the results.
The proposal of Kwon went to the validator votes, and 80% of the voters were in favor. Meanwhile, there were only 15% opposed the idea. For the time being, it is too early to predict whether Kwon will be able to revive the Terra Chain tokens.
There are still five days before the Terra Community comes together to put the new proposal to a vote. In case more than 33.4% of voters decline the proposal, it will be discarded despite getting massive backing from Terra Chain validators.