27th May 2022 > > Another Terra update.

tl;dr

New Terra blockchain is to be released today.

Market Snap (at time of writing)

Market Wrap

The success or otherwise of the new Terra blockchain (see below) might have an outsized impact on the price of BTC.

Curious Cryptos’ Commentary – Terra update

As of today, a new Terra blockchain will be released but without an associated algorithmic stablecoin, known as UST for the original Terra blockchain. It is important to note that this is NOT a hard fork, though that is how it is being represented in some of the less well-informed press.

The old chain will apparently continue as before (presumably without the built in arbitrage between LUNA and UST that caused its implosion in the first place) and has been given the moniker Luna Classic (LUNC) whilst the new one will be called Luna (LUNA).

According to Bitcoin.com:

“The governance decision further details the new LUNA token distribution which includes 30% for the community pool, 35% for pre-attack LUNA holders, 10% for pre-attack UST holders, post-attack LUNA holders will get 10% and post-attack UST holders are eligible for 15% of the supply.

Additionally, the Terra team mentioned that the Terraform Labs wallet, Luna Foundation Guard’s wallet, and the community pool distribution module account will be removed from the LUNA airdrop.”

Any holders of LUNA or UST as of yesterday will receive some number of the new coin. The CCC made a small investment post the attack, but the allocation of (new) LUNA will be nothing to get excited about – with 6.5 TRILLION (old) LUNA in circulation at the point the old chain was suspended due to excessive minting as the UST peg failed, the value of (new) LUNA in recognition of being a post-attack holder will be tiny.

Major centralised exchanges have come out in favour of this plan – I believe that Binance, Huobi, and HitBTC amongst others will list the new coin though Coinbase tweeted:

“Through speaking with customers and ecosystem participants, we are making a tough decision to wind down support for the Terra ecosystem. We are discontinuing support for the existing Terra chain and are not planning to support a potential new Terra chain at this time.”

If you owned (old) LUNA or UST on-chain your allocation of (new) LUNA will happen automatically – you should see the new coins appear in your wallet with no further intervention required other than maybe adding the new contract into MetaMask (contract code unknown at time of publication) if that is your wallet of choice.

Note that your (new) LUNA will be unlocked over time – 30% initially and 70% over the next two years.

If you owned (old) LUNA or UST off-chain i.e., on a centralised exchange, you probably should get your allocation of (new) LUNA if the exchange supports the new chain, but I doubt that will happen immediately.

If any readers need help in tracking down their allocation of (new) LUNA on or off-chain, then please let me know. The CCC team will be delighted to help.