With the Luna circulating supply now in the trillions, restarting the chain prior to the attack is deemed one way to revive the wider Terra ecosystem.
Here's everything you need to know about the Terra Luna fork.
Terra Luna Hard Fork
TerraForm Labs CEO Do Kwon has proposed a Terra Luna hard fork to rebuild the ecosystem.
In his second (but actually third) Terra Ecosystem Revival Plan, Kwon has pitched prioritising the Terra ecosystem over UST. "The Terra ecosystem and its community are worth preserving," he said in the proposal. Describing this as "Terra's DAO hack moment", it mirrors several elements of the original Ethereum hard fork.
His now-finalised proposal would fork Terra into a new chain without UST or any algorithmic stablecoin elements. This would be called Terra, while the original chain would be Terra Classic (alongside Luna Classic, or LUNC).
The new chain will also bring about Luna 2.0. Those involved in the ecosystem would be airdropped their allocation of the 1 billion Luna 2.0. After some adjustments, this would be split as follows:
- 35% to pre-attack Luna holders.
- 10% to post-attack Luna holders.
- 10% to pre-attack aUST holders.
- 15% to post-attack UST holders.
- 30% to a community pool controlled by a staked governance.
- 10% of this towards developers.
The pre-attack snapshot would come from Terra block 7544910, from May 7, 2022. A post-attack snapshot would happen at block 7790000 on May 27.
Kwon has warned that UST or Luna holdings that are bridged off of Terra may miss out on these snapshots and airdrops.
Notably, TerraForm Labs is missing from this allocation. Kwon said it would be removed from the airdrop to "[make] Terra a fully community-owned chain."
After launch, Luna would have an inflation rate of 7%, distributed to stakers.
This amended proposal has now been endorsed by the Terra Builder Alliance, which first put forward a fork proposal with their Luna Go Forward Proposal.
Do Kwon's initial recovery plan focused on repegging TerraUSD (UST), before the hard fork plan was created. To separate from this UST focus, it seems the Terra team is using the mantra "Terra is more than UST" to emphasise its commitment to the wider ecosystem.
Of course, this is just one proposal, with many questioning whether holders would just dump their tokens as soon as a new chain launches. Binance CEO CZ has also criticised the idea of a fork, explaining it doesn't create value for the Terra ecosystem. Others seem more in favour of a Luna burn to reduce the circulating supply.
One developer involved with Ethereum Classic has also spoken against the hard fork. He stated that more time is needed to investigate and evaluate alternative options aside from the fork.
For the fork to happen, it would first need to pass the ongoing governance vote.
Terra Luna Hard Fork Timeline
The first stage of the hard fork is here, with the Terra Luna vote for the new network now in its voting phase. Of the 262 million votes cast, 66% are in favour of the fork, with just two days to go.
If it passes, which now looks likely, the network plan will pass to the next phase. The Terra Core release and launch instructions will be published on May 21, Developers will then have until May 25 to register.
Then, on May 27, the Launch snapshot for UST and Luna holders will be taken. On the same day, the network and chain upgrade will then launch.
Of course, while the proposal is finalised, this still depends on development progressing that quickly. As stated in the proposal: "Snapshots can change depending on development readiness."
For example, while meant to go live on May 21, the Terra Core release is not yet available as of May 23. On May 21, Do Kwon said "the release will be cut very soon".
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Is The Luna Hard Fork Actually A Fork?
While commonly referred to as a fork, it appears the new Luna plan is not exactly a fork of the existing Terra blockchain.
For a fork to happen, it must retain the transaction and block history of the previous chain until the forked block splits it in two (hence the name 'fork').
However, the ecosystem revival plan appears to suggest this won't happen. Instead, the new Terra chain will restart without this history.
Indeed, Terra is now moving away from the Terra Fork branding towards Terra 2.0. The official Terra account retweeted a post by developer Will Chen that said the new chain is not a fork.
"It's a brand new network, with fresh state, no market, treasury, oracle modules and WASM state," Chen said on Twitter.
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