Speaking on the Terra network’s demise has been greatly magnified. At least, that is what the LUNAtics will want to believe as multiple developers pledge to do their part to help the ecosystem on its journey to regaining its feet.
Developers Respond To Kwon’s Call
The Terra ecosystem came crashing down like a house of cards on May 9. TerraUSD (UST), the algorithmic stablecoin supposed to provide the decentralized funds that Do Kwon believed the DeFi ecosystem badly needed, failed to live up to its billing. Things took an unexpected turn as the algorithmic stablecoin lost its peg and brought the Terra ecosystem to its knees. Its vulnerability to investors became clear, with over $20 billion wiped off the market in days.
Notwithstanding, the damage didn’t just end there; the mechanism fabricated to stabilize the UST token that the de-pegging of UST equaled a spike in the supply of LUNA, which drove the once-promising token to zero. Notably, during the crisis, the Luna Foundation Guard (LFG) turned to their Bitcoin reserves to create demand for the UST stablecoin, but even after selling over 80,000 BTC, the peg just couldn’t be restored.
Ultimately Terraform Labs founder and the brain backing the growth of the UST stablecoin, Do Kwon, has been driven to throw in the towel and close the curtains on the UST project while proposing a plan to compensate investors and revive the Terra ecosystem.
As covered earlier by Cryptolifedigital, Do Kwon presently plans to fork the Terra ecosystem into a new drain chain focused on developers to restore the Terra ecosystem.
Do Kwon’s proposal to create a new Terra blockchain without an algorithmic stablecoin has now been approved by the Terra community.
The new chain would completely cut out the beleaguered UST algorithmic stablecoin and focus on decentralized finance (DeFi) applications. The existing chain would continue as Terra Classic and holders of LUNA on this chain would receive an airdrop of the new chain’s token. Notably, Terra will be community-owned in that Terraform Labs will not be a part of the airdrop.
The new blockchain, as well as the new LUNA token that will be airdropped to former UST and LUNA investors, is expected to go live on Friday.
Consequently, the embattled CEO has called for developers to commit to building on the new chain.
“Terra 2.0 is focused on developers – developers will get an immediate emergency allocation of Luna tokens to fund runway, as well as a pool of tokens earmarked to align the interests of the base layer with its builders. … Call to action: we encourage Terra developers to signal support & commit to building on the fork on public channels ASAP.”
Notably, a series of Developers have answered positively to Do Kwon’s call. At least ten protocols and developers have expressed commitment to building on the new chain.
Crypto journalist Zach Guzmán, acknowledging the ability of the ecosystem to attract developers, tweeted, “The reason why I focused so much on Terra was that it set out on a mission that had taken down every player before it. Still, it attracted an incredibly talented dev community who built some incredible products unrelated to what failed. For them, I hope.”