Terra proposes to create 'Luna version two'

Do Kwon, the founder of Terraform Labs, proposes a plan to revive the Terra ecosystem by creating a new Luna token that is not affiliated with the UST.

"Terra Luna will take precedence over UST," Kwon posted on Twitter April 17, nearly a week after two of Terra's tokens, Luna and stablecoin UST , lost most of their value overnight.

Terraform Labs founder Do Kwon. Photo: Terra

According to Fortune , this is a major strategic change for Kwon and Terraform Labs. Previously, this 9x CEO announced that he would mobilize all resources to save UST, including dumping $2.4 billion worth of Bitcoin from the fund behind the project, Luna Foundation Guard (LFG). However, the rescue failed, as UST lost the one dollar anchor, while Luna lost millions of times in value.

Unlike other stablecoins like Tether (USDT) or Binance USD (BUSD) that are backed by real assets, UST is price controlled through an algorithm linked to Luna. This is the reason why both are impacted and plummet in value when something goes wrong.

To fix this, Kwon said it will create a new version of the blockchain that is not related to the UST. "We plan to create a new Terra blockchain. The current Terra chain is forked. The new version uses the name Luna and is no longer linked to the UST stablecoin algorithm. The old chain will change to Terra Classic, codename Lunc. Both will co-exist," he said.

In the plan on the Terraform Labs homepage, the company lays out a specific roadmap for the new blockchain. Accordingly, Luna has just been airdropped (issued free cryptocurrency) to holders of Lunc (Luna after renaming) and UST. The rest is for developers and the community.

“We believe that the distribution of the new token along with LFG's remediation efforts will benefit old Luna and UST holders in a number of ways. More importantly, it's the most likely path to the system's revitalization. Terra ecology," Kwon tweeted.

Voting is expected to take place today. If approved, the new tokens will be distributed on May 27.

However, Kwon's proposal was quickly met with criticism. On Twitter, many accounts asked Terraform Labs to focus on compensating Luna and UST investors instead of trying to redirect to another plan.

Do Kwon was born in 1992 in South Korea. Before Luna and UST crashed, Kwon and his colleagues believe they created a better, less error-prone version of these tokens. With UST ranked fifth among the top stablecoins, Kwon had ambitions that the coin would stabilize, possibly even displacing the USD.

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