Do Kwon the South Korean cryptocurrency developer and CEO & co-founder of Terraform Labs has come out with a ‘recovery plan’ to save Luna. The plan is based on revival of Terra network with a new ‘hard fork’. Do Known claims that his plan will solve the design flaws of Terra network.
LUNA Hard Fork
A hard fork can simply be explained as change to the blockchain’s underlying protocol (cointelegraph.com). In hard fork the rules governing the protocol are changed and may have a wide ranging implications on the cryptocurrency entire protocol. It is important to know that the hard fork would make previous transactions and blocks either valid or invalid. A hard fork is the result of several reasons like for adding new functionality to the protocol, improving the security , solving any disagreement in a cryptocurrency’s community or reverse transactions on blockchain.
For LUNA, Terra 2.0 hard fork has been proposed. The Luna hard fork will result in creation of new cryptocurrencies, Terra (LUNA) and a Terra Classic. The proposal was also tweeted by Do known on twitter.
However,the LUNA community is divided on the Luna hard fork proposal. The twitter voting for Luna will remain open for a week. Out of the validators 38 have voted Yes and 5 have voted no (including stake.systems, DSRV, Allnodes.com, SolidStake and Stake5 Labs). So far, 82.48% have voted in favor of the proposal while 17.7% have favored No with veto power.
Will the Luna Revival Plan Work?
Do Kwon has a big task ahead. His team has to build a new network and distribute 1 billion tokens to Terra’s stakeholders or affected parties. Kwon plans to air drop the new LUNA tokens to his developer team, stakers, holders as well as residual UST holders.
It is hard to predict whether Kwon Luna ‘recovery plan’ will work or not. Luna dropped from $80 earlier this month to almost zero last week. At the time of writing LUNA/BUSD pair is trading at 0.000132 on Binance. Even the recovery to $1 seems impossible. The current market supply of Luna is 6,533.67 billion, means a $1 value per Luna will result in its market cap of 6.53 trillion. The current total market cap of cryptocurrency is $1.29 Trillion. So those thinking of large gains from Luna must look in these simple mathematical calculations. The only possibility is burning large circulating supply of Luna. Moreover, despite a large market cap, trust building of investors and community will be hard after major crash of Luna.
Binance CEO Response on Luna Hard Fork
Crypto exchange Binance CEO Changpeng “CZ” Zhao also few days back revealed that:
“He’s ‘poor again’ after its Luna holdings once worth $1.6 billion crashed and are now worth just $2,200”
On Luna recovery plan Zhao commented in a tweet that:
Personal opinion. NFA.
This won’t work.
- forking does not give the new fork any value. That’s wishful thinking.
- one cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges).
Where is all the BTC that was supposed to be used as reserves?
Binance has also offered its BNB Chain support to Terra ecosystem projects. Zhao tweeted
Gwendolyn Regina, BNB Chain’s investment director, told Cointelegraph about the latest development and said:
“The Terra ecosystem has a lot of talented creators and developers, and our support is aimed at helping those builders and teams, building new projects on the BNB Chain. Hence, we are simply interested in supporting developers and projects so that they do not miss out on future potential.”