On May 18, Terraform Labs will present a new governance proposal to split the current blockchain. It entails forking a new chain that is devoid of the algorithmic stable coin. The previous chain would be Terra Classic with the Luna Classic (LUNC) token, while the new chain would be Terra with the LUNA token.<\/p>\n

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The new LUNA tokens will be distributed to Luna Classic stakeholders, residual UST holders, and Terra network developers from the prior version.<\/p>\n

A significant chunk of the token distribution will go toward “creating an emergency runway for current Terra app developers” and “aligning developer interests with the ecosystem’s long-term viability.”<\/p>\n

\u00a0No Profits Ecosystem.<\/h2>\n

At the time of launch on May 27, one billion new Luna tokens will be generated and distributed, with a quarter going to the community pool managed by staked governance and the other quarter going to UST holders.<\/p>\n

A “pre-attack” snapshot from right before the system failed on May 7 will be used to distribute 35% to LUNA stakes, and 10% to LUNA holders. The remaining funds will be distributed to ecosystem developers.<\/p>\n

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Does Kwon state that opposing interests made reaching an agreement difficult? Diverse stakeholder interests, including LUNA and UST holders, as well as Terra builders, make it “very difficult and improbable to obtain agreement on a unified, congruent strategy,” he said, before adding:<\/p>\n

The current ecosystem is based on the supply and demand concept, with LUNA being created and destroyed to redeem UST. This works great while there is demand and prices are rising, but the system eventually collapsed due to a major liquidation from Defi protocols that offered enormous profits on stable coin staking.<\/p>\n