Terra restructuring plan is approved
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After seven days of voting, Terra validators finally approved the network restructuring plan. According to the proposal’s official website, voting ended on Wednesday.
In total, the validators cast more than 305 million votes, which corresponded to 83.27% of the total quorum. The “yes” won with 200.4 million votes – 65.5% of valid votes. Another 64.2 million votes abstained (20.98%), while 40.3 million (13.2% of votes) rejected the proposal.
Orion.money, the biggest validator and responsible for 9.68% of the votes, abstained from voting. However, only eight validators abstained, while 42 voted in favor, which offset Orion’s unit weight.
Despite the large quorum in terms of votes, the adhesion of validators was very low. Of LUNA’s 146 validators, 92 did not vote, including some of the most weighted on the network. Only three of them voted against.
With the proposal approved, the Terra network will be split in two through a hard fork. Terra Classic will be the old network, while the new blockchain will continue under the name Terra. This division is scheduled to take place on Friday (27).
Understand the restructuring plan
Created by Do Kwon, CEO of Terraform Labs, the proposal aims to restore Terra’s credibility after the collapse of the LUNA token and the UST stablecoin. In addition to the restructuring, the proposal also ends UST, leaving only LUNA.
Launched on May 17, the proposal was rejected out of hand by the community. In a preliminary poll, 90% of the 1,590 people who responded to a poll on the proposal rejected the network’s split. However, Kwon submitted it to the validators for approval anyway.
During the seven days of voting, the “yes” led practically all the time. At first, the approval ratings exceeded 90%, but as the validators voted, the approval got lower. Finally, 65.5% of the votes were in favour.
In addition, the proposal suggests an airdrop of tokens for ecosystem supporters. Those who still have LUNA, which will be called Luna Classic (LUNC), will earn new LUNA tokens proportionately. UST holders will also earn the new tokens.
Distribution changes
In total, the airdrop will distribute 1 billion new tokens, divided as follows:
- 25% – Community pool, controlled by governance;
- 1% – Emergency allocation of essential developers;
- 4% – Essential developers;
- 35% to pre-attack LUNA holders;
- 10% to pre-attack UST holders;
- 10% to post-attack LUNA holders.
Simultaneously, 20% of the tokens would also go to UST holders, but Kwon reduced this percentage to 15%. According to the CEO, the modification meets the demands of the community itself, but was criticized for having been made with the vote already underway.
Finally, the proposal also calls for the Terraform Labs (TFL) wallet, responsible for the ecosystem, to be removed from the whitelist for the airdrop. In other words, this would make the Terra network a chain fully owned by the community.
