In a tweet to the Crypto community, Terra announced that it is developing Terra 2.0, marking a complete departure from the beleaguered Terra 1.0 platform.
It is important to note that the UST and LUNA’s designers made them concurrently, and they had incorporated an algorithmic mechanism between the two digital assets to ensure that the UST maintains an outstanding $1 value by balancing the supply and demand of the two tokens.
The revamped platform will have the Luna as its native token, which is intended to give the Crypto a new lease of life after investors frantically dumped it following the plunge of the TerraUSD (UST) Stablecoin.
The New Terra Blockchain Has the Community Support
The passing of Proposal 1623 comes after the recent rejection of Do Kwon’s form proposed by the Terra community. If the plan had sailed through the vote, it would have created two distinct Blockchain platforms- Terra and Terra Classic. The classic version would have the Luna Classic (LUNC) as its native token, while the Terra blockchain would have the LUNA.
A week ago, the opposing vote was seemingly an end of Terra, which at its heyday had a combined market capitalization of $60 billion for its two Cryptos.
Like Do Kwon’s proposal, Terra 2.0 also seeks to abandon the UST and reestablish itself as a new platform with a new Crypto. Terra Labs has confirmed that a new blockchain will be generated afresh, and no hard fork will take place. The new platform will have its protocol and features to support a remodeled LUNA token.
There Will Be a New Airdrop
Terra will distribute LUNA tokens on the new platform. 30% will be distributed to equity investors. 35% will be assigned to LUNA hodlers who will recoup their digital assets before the plunge. Most significantly, UST holders will also receive 10% of the airdrop, while a further 25% will be reserved for current holders of UST and LUNA.
Proposal 1623 seeks to burn the UST and overhaul the LUNA to improve investor confidence, which plummeted following the UST crash.
Although the Terra community overwhelmingly supports the latest proposal, critics are more vocal in their skeptics, and it’s only a matter of time before their confidence gets restored.
A Market Shakeup Is in The Offing
Not only have the LUNA and UST crashes stoked the bears in the Crypto market. The market capitalization is now at $1.2 trillion, although dominant Cryptos such as BTC and ETH have established a support level for the short term.
Regulators such as the ECB are mooting regulations to rein on Cryptos that they deem risky. Of prime concern are algorithmic Stablecoins such as the UST, which Terra is facing.