A Luna fork looks to be the path towards a Luna recovery in the aftermath of the Luna crypto crash after TerraForm Labs CEO created a Terra Luna hard fork proposal.
With the Luna circulating supply now in the trillions, restarting the chain prior to the attack is deemed one way to revive the wider Terra ecosystem.
TerraForm Labs CEO Do Kwon has proposed a Terra Luna hard fork to rebuild the ecosystem.
In his second (but actually third) Terra Ecosystem Revival Plan, Kwon has pitched prioritising the Terra ecosystem over UST. "The Terra ecosystem and its community are worth preserving," he said in the proposal. Describing this as "Terra's DAO hack moment", it mirrors several elements of the original Ethereum hard fork.
His now-finalised proposal would fork Terra into a new chain without UST or any algorithmic stablecoin elements. This would be called Terra, while the original chain would be Terra Classic (alongside Luna Classic, or LUNC).
The new chain will also bring about Luna 2.0. Those involved in the ecosystem would be airdropped their allocation of the 1 billion Luna 2.0. After some adjustments, this would be split as follows:
35% to pre-attack Luna holders.
10% to post-attack Luna holders.
10% to pre-attack aUST holders.
15% to post-attack UST holders.
30% to a community pool controlled by a staked governance.
10% of this towards developers.
The pre-attack snapshot would come from Terra block 7544910, from May 7, 2022. A post-attack snapshot would happen at block 7790000 on May 27.
Kwon has warned that UST or Luna holdings that are bridged off of Terra may miss out on these snapshots and airdrops.
Notably, TerraForm Labs is missing from this allocation. Kwon said it would be removed from the airdrop to "[make] Terra a fully community-owned chain."
After launch, Luna would have an inflation rate of 7%, distributed to stakers.
This amended proposal has now been endorsed by the Terra Builder Alliance, which first put forward a fork proposal with their Luna Go Forward Proposal.
Do Kwon's initial recovery plan focused on repegging TerraUSD (UST), before the hard fork plan was created. To separate from this UST focus, it seems the Terra team is using the mantra "Terra is more than UST" to emphasise its commitment to the wider ecosystem.
Of course, this is just one proposal, with many questioning whether holders would just dump their tokens as soon as a new chain launches. Binance CEO CZ has also criticised the idea of a fork, explaining it doesn't create value for the Terra ecosystem. Others seem more in favour of a Luna burn to reduce the circulating supply.
One developer involved with Ethereum Classic has also spoken against the hard fork. He stated that more time is needed to investigate and evaluate alternative options aside from the fork.
For the fork to happen, it would first need to pass the ongoing governance vote.
Those are some basics you need to know about the Terra Luna fork.
