The proposal to create a new genesis chain for Terra LUNA has passed with just 65% of voters voting “yes,” 20% “abstain,” and 13% “no with a veto.” Therefore, on May 27, a new LUNA-only blockchain will be launched at block 0, and the current LUNA token will be renamed Luna Classic.
The new chain will not be a fork of the current Terra blockchain; however, a snapshot will be taken of token holders before and after the attack to airdrop tokens to Luna Classic holders. The voting system used within the governance of Terra blockchain has had several issues during this crisis.
Still, a decision has finally been made as to the direction of the ecosystem. Many projects have indicated their support for the new chain. It is currently unknown what will happen to the legacy chain in the long run. Will some projects continue to build on Luna Classic? Will the peg for UST ever be restored? There is only speculation, but all eyes will be on the May 27 launch of the new LUNA token.
According to the distribution schedule outlined in the proposal, the legacy LUNA token holders will be airdropped with new tokens. However, just five days before the end of the vote, Terra amended the proposal with the following controversial changes.
“Pre-attack Luna holders distribution – for all holders with a snapshot balance of 10k Luna or less, 30% unlocked at genesis; 70% vested over 2 years thereafter with 6 month cliff. This is to ensure that small Luna holders have similar initial liquidity profiles. This would cover 99.81% of Luna wallets while only representing 6.45% of total Luna at the Pre-attack snapshot.
Post-attack UST holders distribution – 20% → 15%. This is to ensure that depeg related allocation is on par with the original stakeholder (pre-attack Luna) allocation. The 5% saved goes to the community pool.
Increase initial float: all initial float allocations modified from 15% → 30% to increase initial token float.”
These amendments create the token distribution outlined below:
- Community pool: 30%
- 10% earmarked for developers
- Pre-attack LUNA holders: 35% (various unlock schedules)
- Pre-attack aUST holders: 10% – 500K whale cap (30% unlocked at genesis)
- Post-attack LUNA holders: 10% (30% unlocked at genesis)
- Post-attack UST holders: 15% (30% unlocked at genesis)
Around 17% of the ecosystem did not vote on the proposal, but with just 13% voting to veto, this would not have been enough to stop it from passing. At least 33% of votes would have to reject the proposal for it to fail. As this did not happen and a quorum of more than 40% was achieved, the vote has passed, and work can begin to set up the new blockchain.