Terra’s community approved Do Kwon’s plan to revive the project and the new blockcahin will be launched in the next few days and will include a new distribution of the LUNA tokens so let’s read more today in our latest cryptocurrency news.
Terra’s “proposal 1623” has plans to revive the collapsed Terra ecosystem which was approved by the community. Do Kwon, the creator of the Terra ecosystem proposed new plans which included the creation of a new blockchain and issuing LUNA tokens. As per the data from Terra station, 65.50% of the voters supported the proposal. More than 20% of the voters abstained and 13.20% of the voters opposed the proposal with a veto.
Following the approval from the Terra community, the Terraform Labs, the organization supporting Terra will go ahead and deploy the new blockchain so the relaunch is slated for May 27. The distribution model for the new LUNA tokens included 30% of the community pool and 35% of LUNA holders before the crash and 10% for pre-crash Anchor staked UST holders as well as 10% for post-crash LUNA holders and 15% for post-crash UST holders. The users that held thorugh the entire period are entitled to a few distributions including both the pre and post-crash allocations.
The distribution of the tokens is subject to a vesting period and cliff which means users will not get their tokens on May 27. The proposal included the removal of the Terra algorithmic stablecoin UST among other items so earlier this month, the UST stablecoin lost the dollar peg and never recovered. The algorithmic stablecoins are governed by the smart contracts and in the case of UST, the algorithm is the arbitrage mechanism between UST and LUNA as the native token of Terra.
Once UST dropped below the peg, the users can buy the discounted stablecoins and swap with $1 of LUNA so if UST moves above the peg, the users can make another trade. The algorithm proved inefficient when the peg of UST dropped and opened up a huge arbitrage opportunity between LUNA and UST so as a result, the price of both LUNA and UST wiped out about $40billion from investors. LUNA is up 14.10% over the past day and trades at $0.0001844. LUNA dropped 100% from the ATH of $119.18 recorded in April 2022 only a month before the crash.
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