Do Kwon's Terra Revival Plan Passes Community Vote Despite Criticism

Terra, the algorithmic stablecoin project whose collapse earlier this month prompted a widespread crash of the entire cryptocurrency sector, is being rebooted as 'Terra 2.0' in an attempt to recover investor losses. The revival plan, tabled by Terra CEO Do Kwon was put to a vote over a week back — a vote that the new proposal has now won following the approval of 65 percent of Terra investors. The controversial Terra proposal 1,623 received a 65.5 percent approval rate with over 200 million votes in favor. While 20.98 percent abstained from voting, the "no with veto" votes comprised 13.20 percent.

The proposal's acceptance by the Terra community now means that on May 27, a new LUNA-only blockchain will be launched at block 0, and the current LUNA token will be renamed LUNA Classic. The new chain will not be a fork of the current Terra blockchain; however, a snapshot will be taken of token holders before and after the attack to airdrop tokens to LUNA Classic holders.

As such, the old Terra blockchain will still exist, but the team has decided to abandon the failed UST stablecoin.

As part of the proposal, the Terra team is working closely with several centralised exchanges to support an upcoming airdrop to its community. 35% of the LUNA tokens will be airdropped to holders of pre-attack LUNA and UST. A large chunk of the token distribution will be allocated for Terra dApp developers and to the overall ecosystem.

Further details regarding the launch of Terra 2.0 are yet to be announced. So far, the majority of the Terra community is supporting the decision to relaunch the protocol —but not surprisingly, some people are still raging over the collapse of UST and LUNA.

Terra's founder, the charismatic but controversial South Korean entrepreneur Do Kwon, said the motivation for rebooting the currency was to support the wider platform that had built up around Terra.

"While UST [the terra stablecoin] has been the central narrative of terra's growth story over the last year, the distribution of UST has led to the development of one of the strongest developer ecosystems in crypto," Kwon said in his proposal.

"The terra ecosystem and its community are worth preserving. Terra's app ecosystem contains hundreds of developers working on everything from defi to fungible labour markets, state-of-the-art infrastructure and community experience. Although distressed, [terra has] strong brand recognition and a name that almost everyone in the world will have heard about."