After the recent collapse, the Terra ecosystems has been working on a revival plan. A majority of the Terra community members have voted in favor of a hardfork.
In the latest development, Terra has published an amendment to proposal 1623 and has made three major revisions following the community feedback.
1. Increasing the Genesis Liquidity
With this move, Terra claims to be protecting the interest of smaller wallet holders who were holding LUNA before the attack. Terra says that it has increased the initial liquidity parameters from 15% to 30% for “pre-attack $aUST holders, post-attack $LUNA holders, & post-attack $UST holders”. This will help to mitigate future inflationary pressure.
2. Pre-attack LUNA Holders Will Get New Liquidity Profile
The new liquidity profile will give wallets with less than 10K LUNA to have the same genesis liquidity, 30% unlocked at launch. The rest 70% of liquidity will open up over two years every 6-month duration.
Terra adds: “Introducing this new liquidity profile ensures 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”.
3. Decreasing Distribution to Post-Attack UST Holders
Terra said that it has decided to reduce the allocation for post-attack UST holders from 20% to 15%. This will ensure that the de-peg-related allocation stays on par with the original stakeholder allocation.
Terra says that the 5% change from decreasing the distribution to post-attack UST holders shall be allocated to the community pool. Terra has opened up the voting for proposal 1623 which will end in 5 days.
The collapse of the Terra ecosystem has shaken the entire crypto market. It has also turned out to be one of the biggest and the fastest wealth erosion for crypto investors evaporating over $40 billion in the matter of just a week.
Some of the big investors had to write off tens of millions of dollars in this market correction.