Difference between revisions of "LUNA Collapse in May 2022"

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LUNA Collapse in May 2022 (view source)

Revision as of 23:47, 16 May 2022

165 bytes removed ,  23:47, 16 May 2022
→‎Rescue efforts and second depeg: ecosystem revival plan section
m (→‎Aftermath: investor who visited Do Kow)
(→‎Rescue efforts and second depeg: ecosystem revival plan section)
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Do Kwon tweeted that Terra would increase the redemption capacity of UST to allow the peg to stabilize quicker.<ref>https://twitter.com/stablekwon/status/1524331171189956609</ref> This would result in more LUNA being in circulation, with some crypto twitter users estimating a 6x increase in circulating supply.<ref>https://twitter.com/pythianism/status/1524432742892507136</ref> From May 11th to 12th, it has resulted in LUNA’s supply increasing from 1.5 billion tokens to 110 billion tokens so far, and is expected to continue to rise.<ref name=":0" /> On May 12th, LUNA hit a low of $0.00079.
Do Kwon tweeted that Terra would increase the redemption capacity of UST to allow the peg to stabilize quicker.<ref>https://twitter.com/stablekwon/status/1524331171189956609</ref> This would result in more LUNA being in circulation, with some crypto twitter users estimating a 6x increase in circulating supply.<ref>https://twitter.com/pythianism/status/1524432742892507136</ref> From May 11th to 12th, it has resulted in LUNA’s supply increasing from 1.5 billion tokens to 110 billion tokens so far, and is expected to continue to rise.<ref name=":0" /> On May 12th, LUNA hit a low of $0.00079.


On May 13th, Do Kwon released a Terra Ecosystem Revival Plan on the Terra forum.<ref>https://agora.terra.money/t/terra-ecosystem-revival-plan/8701</ref> If approved, this proposal would reset the network ownership to 1B tokens and have a new distribution plan:<blockquote>Validators should reset the network ownership to 1B tokens, distributed among:
On May 13th, Do Kwon released a Terra Ecosystem Revival Plan on the Terra forum.<ref>https://agora.terra.money/t/terra-ecosystem-revival-plan/8701</ref> If approved, this proposal would reset the network ownership to 1B tokens and have a new distribution plan.


* '''400M (40%)''' to Luna holders before the depegging event (last $1 tick before the depeg on Binance should be reasonable), bLuna, LunaX and Luna held in contracts should also be recipients, minus the Terraform Labs account at terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6. The new chain should be community owned. Preserving decent ownership of the network in its strongest believers and builders is important.
On May 14th, LUNA rebounded over 1,500% from lows and overtook UST market cap for the first time since the beginning of the depegging event.
* '''400M (40%)''' to UST holders pro-rata at the time of the new network upgrade. UST holders need to be made whole as much as possible
* '''100M (10%)''' to Luna holders at the final moment of the chain halt – last minute marginal luna buyers should be compensated for their role in attempting to provide stability for the network
* '''100M (10%)''' to the Community Pool to fund future development.
* All Luna besides the third tranche should be staked at the network genesis state.
* The network should incentivize its security with a reasonable inflation rate, say 7%, as fees will no longer be enough to pay for security without the swap fees.
</blockquote>On May 14th, LUNA rebounded over 1,500% from lows and overtook UST market cap for the first time since the beginning of the depegging event.


Terra announced over Twitter that a post mortem report would be coming as soon as possible.<ref>https://twitter.com/terra_money/status/1525226016972582912?s=21</ref>
Terra announced over Twitter that a post mortem report would be coming as soon as possible.<ref>https://twitter.com/terra_money/status/1525226016972582912?s=21</ref>
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On May 16th, the Luna Foundation Guard released a Twitter thread detailing how they sold over $3b in assets to defend the UST peg.<ref>https://twitter.com/lfg_org/status/1526126703046582272?s=21</ref>
On May 16th, the Luna Foundation Guard released a Twitter thread detailing how they sold over $3b in assets to defend the UST peg.<ref>https://twitter.com/lfg_org/status/1526126703046582272?s=21</ref>


Terra and Do Kwon released a Twitter thread and governance proposal detailing the plans to fork Terra.<ref>https://twitter.com/stablekwon/status/1526258273820651520?s=21</ref><ref>https://agora.terra.money/t/terra-ecosystem-revival-plan-2/18498</ref> Under this new proposal, Terra would create a new chain and the previous chain would remain active under “Terra Classic.”
=== Terra Ecosystem Revival Plan 2 ===
Do Kwon released a Twitter thread and governance proposal detailing the plans to fork Terra.<ref>https://twitter.com/stablekwon/status/1526258273820651520?s=21</ref><ref>https://agora.terra.money/t/terra-ecosystem-revival-plan-2/18498</ref> Under this new proposal, Terra would create a new chain and the previous chain would remain active under “Terra Classic.”


The efforts are ongoing.
UST would no longer be used and the chains would not have new algorithmic stablecoins. Terra Classic would have Luna Classic (LUNC) while the new chain would remain Terra (LUNA).
 
Under this proposal the newly forked network will be distributed as follows:<blockquote>'''1,000,000 LUNA Tokens'''
 
* 25% - Community pool, controlled by staked governance
* 1% - Essential Developers emergency allocation. No lockup
* 4% - Essential developers (1 year cliff, 4 year vesting thereafter, granted after launch traction)
* 35% - All bonded / unbonded Luna, minus TFL at “Pre-attack” snapshot
** For wallets with < 1M Luna: 1 year cliff, 2 year vesting thereafter
** For wallets with > 1M Luna: 1 year cliff, 4 year vesting thereafter
* 10% - Luna holders (staking derivatives included) at the “Launch” snapshot - 10% unlocked at genesis, 90% vested over 2 years thereafter
* 25% - UST holders at the “Launch” snapshot - 10% unlocked at genesis, rest vested over 2 years thereafter
</blockquote>


== Chainlink Oracle failure ==
== Chainlink Oracle failure ==
Moleman
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