LUNA Revival Plan
Binance’s Terra (LUNA) investment was previously valued at $1.6 billion, but it is currently only worth $3,000 as of 11 a.m. on May 17. Binance invested in LUNA for four years and received 15 million LUNA cryptos, which it still has today.
Binance also received $12 million in TerraUSD (UST) staking incentives, equivalent to $74 million if the ideal 1:1 UST ratio had been maintained. UST, however, has lost its peg ratio and is currently trading at $0.1303 as of 11 a.m., according to Coinmarketcap data.
So, what are the LUNA owners’ next steps?
Terra Luna Do Kwon, the founder of Terraform Labs, intends to build a new blockchain and give hundreds of millions of new luna tokens to investors who have been burned, according to his Revival Plan 2.0.
Terraform Labs, the firm behind terra. blockchain, UST, and luna have created a plan to arrest the decline. The luna token has dropped from $81 a month ago to a fraction of a penny as of Monday. TerraUSD (UST), a stablecoin designed to retain a $1 value at all times, was depegged. Instead, it’s an algorithmic stablecoin that keeps its value largely through using luna, the terra blockchain’s native currency.
Do Kwon, the CEO of Terraform Labs, feels he has a solution. On Monday, he announced a proposal to “fork” the Terra blockchain. In essence, this means creating a new blockchain that is based on the current one but has major differences. Current luna and UST holders will get a billion luna tokens, which will be used to support the development of new terra apps on the new network.
What is a hard fork, exactly?
A hard fork is a substantial change to a network’s protocol that allows previously invalid blocks and transactions to become valid or invalid. A hard fork, according to Investopedia, necessitates the update of all nodes or users to the most recent version of the protocol software.
How does the Revive Strategy work?
Terra’s community will need to rebuild the chain, and validators will need to reset the network to 1 billion tokens, which will be distributed as follows:
Former Terra Luna holders will get 400 million tokens if their currencies have depreciated considerably.
TerraUSD holders should get 400 million units in proportion.
The remaining 200 million units should be split evenly between the community pool, which will be used to fund future initiatives, and those who bought Terra Luna at the last minute to save it.
The new rate of inflation.
Kwon proposed that the community “incentivize its security with a realistic inflation rate, say 7%,” because income would no longer be sufficient to cover the expense of protection without swap fees.
The network’s ownership is shared.
According to the developer of stablecoins, who feels TerraUSD holders should be reimbursed, stablecoin holders must own a major portion of the network because they were the network’s debt holders.
There is a scarcity of network loyalty.
He also stated that token holders from before the attack must remain for Terra’s ecosystem to continue to create value. Finally, he emphasized that just because TerraUSD did not match the community’s expectations does not rule out the possibility of its future utility.
Will this be sufficient to save Luna?
Some of the largest venture capital firms, notably Galaxy Digital, backed the Terra ecosystem. Terra recognizes that UST and LUNA no longer exist in their current form as it prepares to transform into a full-fledged L1. According to sources, Do Kwon previously failed in a stablecoin project called “Basis Cash.” The Terra community is without a doubt one of the largest. Others are skeptical of Kwon’s idea, such as Binance CEO Changpeng Zhao, despite Zhao’s declaration that he wants to aid Terra’s community.