What is Terra 2.0? Why Terra 2.0?

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The article talks about the current Terra fork proposal with the new Terra 2.0 chain, as well as the comments of the Terra Validators.



On May 20, on the Terra homepage appeared the words Terra 2.0 along with a link to a proposal. So what is Terra 2.0? Please read the article for details.

What is Terra 2.0?​

Terra 2.0 is Terra's new blockchain . This new chain does not replace the current Terra, but works in parallel. Proposal launched on May 18, passed on May 25 with 65% of votes in favor.

Less than 24 hours through the proposal, many exchanges announced to support Terra 2.0 including: FTX, Huobi, Bitfinex...

Terra 2.0 Website: https://www.terra.money/

Why Terra 2.0? Features of Terra 2.0​

The Terra 2.0 proposal comes out because the UST peg loss issue severely affects the current Terra. The cause comes from the UST loss of pegs is too large. At the same time, the Mint - Redeem mechanism of UST and LUNA caused LUNA to sell off, leading to a price split of more than 10,000 times from ATH.

LUNA price divided 10,000 times from ATH
Restoring the current UST price is not possible with Terraform Labs, so Do Kwon - Founder of Terra, proposes a new fork chain.

Specifically, when the proposal is approved, the current Terra becomes Terra Classic with the governance coin of LUNC. The new Terra will not have a UST, and the governance coin will be named LUNA.

Along with that is the new LUNA distribution as follows:

LUNA token information (Terra 2.0)​

LUNA Token Allocation​

  • Pre-Attack LUNA Holders (all LUNAs in Unboned or Bonded status, and LUNA Derrivatives): 35%
  • Community Pool: 30%
    • 10% for developers on Terra.
    • 20% Community Pool
  • Post-Attack UST Holders: 15%
  • Post-Attack LUNA Holders (including LUNA's Derrivatives): 10%
  • Pre-Attack aUST Holders: 10%
New LUNA allocation
Note:

  • Pre-Attack is snapshotted at Terra Classic block 7544910 (May 7, 2022 23:00:04 + 08:00)
  • Post-attack is snapshotted at block Terra Classic Terra Classic 7790000 (May 27, 2022 03:59:51+08:00)
In particular, Terraform Labs does not receive airdrops despite owning LUNA and UST. This means that the new LUNA is fully community-held.

LUNA Token Release Schedule​

  • Community pool: Use through admin.
  • Pre-attack LUNA holders:
    • Wallets with < 10k LUNA: 30% unlock from scratch; 6 months cliff; 70% vested in 2 years.
    • Wallets with < 1M LUNA: 1 year cliff, 2 years vesting.
    • Wallets with > 1M LUNA: 1 year cliff, 4 years vesting.
  • Pre-attack aUST holders:
    • 500K ceiling limit- support up to 99.7% all holders but only 26.72% aUST
    • 30% unlock from scratch; 70% 6 months cliff; 70% vested in 2 years.
  • Post-attack LUNA holders: 30% unlocked from scratch; 6 months cliff; 70% vested in 2 years.
  • Post-attack UST holders: 30% unlocked from scratch; 6 months cliff; 70% vested in 2 years.

Incentive program to build on Terra 2.0​

To encourage projects on Terra Classic, or other parties to stick with the new Terra, Terraform Labs launches the following program:

Urgent Allocation (0.5% of total supply): Immediately after network launch to support while they build the product. In return, they must promise to refund if the product has not been released for 1 year.

Developer Alignment Program (1.5% of total supply): The project on Terra Classic divides this allocation by the weight of the TVL last 30 days from the Pre-Attack snapshot. This allocation has 1 cliff year, 3 vesting year. Projects without TVL will have different policies.

Developer Mining Program (8% of total supply): Some important projects in the ecosystem receive rewards based on TVL rate every quarter for 4 years. These projects are:

  • Infrastructure - Setten
  • Dex - Astroport, Loop, Terraswap, Pheonix
  • Explorer - Finder
  • Payments / onramp - Kado, Alice
  • Wallet - Station, Leap, Falcon
  • Lending market - Mars, Edge
  • Analytics - Coinhall, Flipside
  • Staking derivative - Stader, Lido, STEAK, PRISM
  • Launchpad - StarTerra
  • Bridges - Axelar, Wormhole
  • Stablecoins - USDT / USDC bridged over
  • NFT exchange - Randomearth, Knowhere, Oneplanet, Luart, Talis
  • Insurance - Risk Harbor
  • Structured products - Nexus, Apollo, Aperture
  • Games - UNOPND etc

Comment on Terra 2.0 recommendation​

Contrary to previous suggestions. The launch of Terra 2.0 encountered many obstacles. Typically, during the voting process, Do Kwon had to change the new LUNA allocation to match public opinion.

In addition, based on the voting information of Validators, it can be seen that many "big hands" make late decisions. On May 20, Orion Money, Hashed, SmartStake are the names in the top 5 with the highest Voting Power yet to vote.

But on May 25, Orion Money and SmartStake voted blank, meaning neither objected, but also disagreed. Hashed does not vote.

None of the top 5 Validators voted yes as of May 25
In addition, the 2 names in the top 5, stake.systems and DSRK, voted No with veto, which means disagree and do not return LUNA to the proposal creator when it is not approved.

stake.systems and DSRV vote in disagreement
From there it can be seen that those with the highest voting power either disagree, or are neutral, and no one agrees.

The fact that Do Kwon arbitrarily changed the proposal, as well as many major parties were hesitant and had negative thoughts, showing that Terra 2.0 is not the solution that many people prefer.

FAQ​

List of platforms that support Terra 2.0​

The following exchanges support the airdrop of Terra 2.0: MEXC, Kraken, BigOne, LBank, Bitrue, Huobi, Bitfinex, FTX, OKX, ByBit, Gate, Kucoin, Binance....

List of wallets that support Terra 2.0​

The following wallets support storing assets on Terra 2.0: Terra Station, Coin98 Wallet, Leap Wallet, Atomic Wallet, XDEFI...

How to get airdrop on exchange?​

The exchange will automatically airdrop the new LUNA to the holders of the old LUNA and UST. So the user does not need to do anything.

Are the snapshots done yet?​

The snapshots have now been completed.

summary​

After much trouble, Terra finally has a method to solve the problem of UST losing pegs. Many people think that the launch of Terra 2.0 will make Terra Classic fade. What do you guys think about this idea? You can comment below to discuss together.
 

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