Is LUNA recovery possible? – Here’s how Terra is attempting a comeback

LAGOS (CoinChapter.com) — While the entire cryptocurrency industry is still recovering from the major collapse of Terraform Labs tokens, Terra USD (UST), and LUNA, several arguments have emerged over the next step for the blockchain platform.

Some investors who lost their funds have called for the total scrapping of the project. While others have reiterated their support for the revamping of the ecosystem through a “hard fork” mechanism.

However, Do Kwon, Terra’s founder proposed a new idea that would lead to the creation of a new chain. Notably, the new chain will maintain the original name Terra (LUNA), while the old chain will be called Terra Classic (LUNC).

According to the blockchain platform, the new chain will focus on drawing decentralized finance applications (dApps) onto its network. Interestingly, Kwon’s proposal has been approved by the majority of Terra community members through a governance vote.

1/ Terra 2.0 is coming.
With overwhelming support, the Terra ecosystem has voted to pass Proposal 1623, calling for the genesis of a new blockchain and the preservation of our community.

— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 25, 2022

The blockchain platform via its official Twitter handle disclosed that 200 million people voted in favor of the new chain. While 20.98% abstained from voting.

Terra Users Commit To UST Burning

Meanwhile, in another attempt to revive Terra‘s community a proposal to burn a large amount of UST emerged. In detail, Terra users proposed to burn 1 billion UST from its community pool to rejuvenate the ecosystem.

6/ Before anything else, the only path forward will be to absorb the stablecoin supply that wants to exit before $UST can start to repeg. There is no way around it.

We propose several remedial measures to aid the peg mechanism to absorb supply:

— Do Kwon 🌕 (@stablekwon) May 11, 2022

The proposal emerged following Kwon’s suggestion that a potential solution to the Terra debacle is to absorb the stablecoin supply. As a result, Terra community voted to burn a large amount of UST and the remaining cross-chain UST that’s deployed on the Ethereum blockchain as incentives.

The proposition was introduced and processed in the first week of May but it failed to perform. This was mainly due to a mismatch in the amount of UST in the community pool and the proposal.

The main objective of the burning proposal is to reduce the network’s bad debt and help restore its stablecoin dollar peg. Additionally, another burning proposal on May 20 and at press time it has gathered over 150 million votes in favor of burning the UST supply.

To clarify, as I’ve noted multiple times i dont think sending tokens to this address to burn tokens is a good idea – nothing happens except that you lose your tokens

Want there to be no confusion whatsoever https://t.co/GrzG9cclAr

— Do Kwon 🌕 (@stablekwon) May 23, 2022

However, Kwon has expressed his disapproval of the UST burning proposal. The embattled Terra founder cautioned the community members against sending LUNA to the burning address.

Crypto Exchanges Express Readiness To Support Relaunch

Meanwhile, several top cryptocurrency exchanges have announced their readiness to support Terra’s upcoming relaunch.

📣 Okcoin will support LUNA 2.0 and the airdrop.
📣 LUNA withdrawals and deposits are temporarily paused for the migration.
📣 Stay tuned for more details.

— Okcoin (@Okcoin) May 26, 2022

Exchanges including Bybit, Kucoin, Binance and Crypto.com have announced plans to support Terra 2.0 when it launches. Other exchanges that pledged their support include FTX, Huobi, Bitfinex, Gate io, Bitrue, among others.

However, the popular decentralized finance (DeFi) project Lido Finance’s DAO voted against providing support for the new chain.

Lido on Terra v2 Update:

Following a discussion on the launch of Lido on Terra v2, the Lido DAO has voted to NOT support the Terra reboot.

This is the result of our governance process and a forum discussion that you can read here:https://t.co/m3b90OQVS4

— Lido (@LidoFinance) May 25, 2022