Recently Terra (LUNA) had one of the worst crashes where the price bottomed below $1 along with the blockchain’s stablecoin, UST which got de-pegged. This price action by Terra affected the whole crypto market.
However, after the collapse, the Terra community worked on the recovery plan and the majority of votes received by the community are in favor of the hard fork.
Three Elements Of Terra’s Proposal
The Terra blockchain has now published an amendment to the proposal 1623 and has made three important revisions after receiving the community feedback
- Increased Genesis Liquidity
While increasing Genesis Liquidity, Terra is happy to protect small wallet holders, the one who held LUNA before the attack. Thus, according to Terra, the initial liquidity parameters were increased by 15% to 30% for UST holders before the attack, LUNA holders after the attack and UST holders after the attack.
- New Liquidity Profile For Pre-attack LUNA Holders
With this plan, the wallets that have less than 10k LUNA will have the same genesis liquidity which is 30% unlocked at launch. The next 70% liquidity will be opened only after two years with the duration of every 6 months.
According to Terra’s statement, the introduction of this new liquidity profile will ensure that smaller LUNA holders will have similar initial liquidity profiles. Now, this initiative will cover 99.81% of the LUNA wallets, which will only represent 6.45% of the LUNA total during the pre-attack period.
- Decreased Distribution For Post-Attack Holders
It has been decided by Terra that the distribution for post-attack UST holders will be reduced from 20% to 15%. Through this plan, the de-peg-related distribution will stay with the original stakeholders.
Additionally, with only a 5% change from the decrease in distribution to post-attack UST holders, they will be allocated to the community pool. Terra’s vote for Proposition 1623 will close in the next 5 days.
