- New LUNA tokens will be distributed to LUNA and UST holders
- VC firm Hashed is reportedly stuck in a $3.5 billion hole but is buoyed by the new plan
The latest proposal to revitalize the ill-fated Terra ecosystem is on the way to being approved by the Terra community. Although voting has five days to go, it has already reached a passing threshold after just two days, so barring a dramatic reversal (voters may change their minds during the voting period), a new Terra network will be formed on May 27th.
That modified “resuscitation plan” was posted to the Terra Governance forums by Do Kwon, the founder of Terraform Labs. It calls for the renaming of the existing Terra Network as Terra Classic (with its native Luna Classic (LUNC) token. New LUNA is to be offered to Luna Classic stakers, Luna Classic holders, UST holders, and a cadre of Terra ecosystem developers “Essential”. This includes projects focused on decentralized exchanges, a block explorer, payment apps, wallets, credit markets, bridges and stablecoins – but not the UST algorithmic stablecoin. Instead of UST that will be put new network on Bridged Tether (USDT ) and USDC.
In addition to a 30% allocation to a “community pool,” 35% will go to LUNA holders prior to the depegging of UST on May 7, 2022 – referred to as “pre-attack” – and 10% to “post-attack.” attack” LUNA as of May 27, 2022. An additional 10% will go to anchor UST depositors at the time of depegging, while 15% will go to UST holders as of May 27.
Notably, Terraform Labs will exclude its own LUNA and UST holdings from the snapshot – the goal is for the new network to be fully community driven. They also limit the exposure that qualifies for the new token to favor a larger number of community participants instead of whales.
Approximately half of the LUNA delegates have voted so far, with 79% voting in favour.
Investors appraise the damage
Venture capital funds with large exposures to Terra have begun to publicly discuss their own losses. These consist mostly of LUNA tokens, which are trading near $0.0001 per token on Saturday, compared to an April 5, 2022 high of $119.
Galaxy Digital did not disclose its losses on LUNA holdings, but did post a net realized gain on digital assets of $356 million first quarter of 2022much of which is attributed to LUNA sales.
Galaxy CEO and founder Mike Novogratz, who got a LUNA tattoo on his arm in early January, wrote at a shareholder Letter that the LUNA crash “will be a constant reminder that risk investing requires humility.”
Delphi Digital has been a frequent supporter of Terra and funded the development of dApps in the ecosystem. In a blog post titled “Findings from the past week‘ the team described its $10 million investment in the Luna Foundation Guard fundraiser via Delphi Ventures’ arm as a ‘total loss’.
“Delphi Ventures did not sell any LUNA during this event,” the post reads.
South Korea-based Crypto VC Hashed has fared far worse. The company has delegated millions of over $3 billion worth of LUNA tokens. With the Terra Network enforcing an unyielding 21-day grace period, it was impossible to sell these tokens even when it became clear that a “death spiral‘ was inevitable.
The post Can a Terra “Rebirth” Save Investors? is not financial advice.
Source: Crypto News Austria