Luna Fork: Is A Terra Luna Hard Fork Coming?

share to other networks share to twitter share to facebook

The idea of a Luna fork is being thrown around online in the aftermath of the Luna crypto crash, but is a Terra Luna hard fork actually a potential outcome?

With the Luna circulating supply now in the trillions, some Luna holders see a fork as the best path for a Luna recovery.

So, what has been said so far about this potential idea for the Terra ecosystem?

Advertisement

Luna Hard Fork

While Do Kwon's initial recovery plan focused on repegging TerraUSD (UST), the TerraLabs CEO has now weighed in on the potential of a Luna fork, creating a second revival plan.

Offering his perspective on a Luna fork, he said: "The Terra community must reconstitute the chain to preserve the community and the developer ecosystem."

His plan sees 1 billion Luna redistributed among a mix of Luna stakers, UST holders, and a community pool.

Indeed, this proposal from Kwon mirrors the exact proposal put forward by the TerraBuilderAlliance with their Luna Go Forward Proposal. It proposes that “Terra re-launches to honour existing UST holders, loyal Luna holders, and developers.”

Under their proposal, a new Luna would be minted and distributed. 40% of this would go to Luna stakers from a snapshot at the time of the UST depeg. The timing of this snapshot is 3 PM UTC on May 9.

40% would also go to UST holders, 10% to marginal Luna holders, and 10% to ecosystem developers.

Of course, this is just one proposal, with many questioning their distribution amounts and how CEX holders would be impacted. Others also questioned whether holders would just dump their tokens as soon as a new chain launched.

Advertisement

A hard fork is a split in the blockchain into two different, parallel networks. One of the most notable hard forks is the Ethereum and Ethereum Classic fork after the DAO attack, which returned the stole ETH. While the Ethereum hard fork did ‘restore’ these funds, a proposed rollback to the scale some in Terra Luna suggest would be slightly different.

A Less Centralised Terra Luna?

At the heart of some of these proposals sees a push for a community-owned, decentralised Luna through a fork.

Some Terra developers within the community have suggested restoring the ecosystem and Layer-1, just without TerraForm Labs.

Do Kwon's fork proposal also acknowledged this. The 40% of the new Luna allocated in his plan ignored the TerraLabs account. "The new chain should be community owned," he said. "Preserving decent ownership of the network in its strongest believers and builders is important."

This comes amid fierce scrutiny over both TerraLabs and Kwon after the Terra Luna collapse.

Regardless of these proposals, no vote on any of these radical changes has been given the green light just yet. But with Kwon seemingly agreeing with the idea, it's not out of the question.