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Update on the Terra Luna scandal - how is the project doing?



Luna Foundation Guard CEO Do Kwon has released a proposal titled "Terra Ecosystem Revival Plan 2." In it, he has outlined an updated version of his original plan, which details the forking of the current Terra blockchain.


Do Kwon also took to Twitter to explain the logic behind the new proposal. In the first paragraph, he expressed that there are several parts of the Terra community that should be preserved:


Terra's app ecosystem contains hundreds of developers working on everything from defi to fungible labor markets, cutting-edge infrastructure and community experience

Terra Station has a large install base with more than a million users around the world.

Despite being in trouble, she is highly recognizable and has a name that almost everyone in the world has heard of.

He proposed keeping both blockchains, with the original blockchain being renamed Luna Classic ($LUNC) and another chain taking over the original ticker ($LUNA) based on a May 7 snapshot. 


What about the losses from UST decoupling?

Due to the timing chosen, it means that anyone who sold UST after dollar decoupling will not be compensated for their losses. He has also suggested that his company, Terraform Labs, "prepares the core public infrastructure, wallets, genfile and release binary for launch." Also, the May 7th snapshot would mean that those who purchased Luna after May 7th would not receive an airdrop of new coins.


Is Do Kwon's recovery plan a dead end?

A key part of Terra's recovery plan is the removal of Do Kwon's Terraform Labs and full community adoption of blockchain.


But that aspect of the plan may have been brought forward. An old interview with Kwon that recently resurfaced shows the Terra founder talking about a "kill switch" for Terraform Labs (TFL).


The Terra Restoration proposal involves a hard fork to a new chain called Terra Version 2. Also, new LUNA tokens will be distributed to the holders of the old blockchain. 


In the 2021 interview, Kwon says that if Terraform Labs were in a position where it was no longer able to "serve the community in the best way possible," it would "pull the trigger" and all connections to the blockchain would cap.


With the responsibility for the Terra crash now falling squarely on Kwon and TFL, such a scenario could play out. Kwon had described the move as "protocol Armageddon."


“We pull the trigger and 24 hours later we're gone. We burn our entire fortune, cut all our ties, and that's it. That's just in case things develop a little quicker than we expect."


Speculation upon speculation

The interview has now fueled speculation that TFL's Terra crash was planned. However, Twitter user @FatManTerra, who dug up the interview, suggests that Kwon's comments may not have been malicious, but rather an additional decentralization measure.


However, other users pointed to reports that Kwon had moved TFL from South Korea to Singapore just a week before Terra collapsed. Kwon's suggestion to " hardfork " LUNA had also drawn criticism from several notable crypto voices, including Binance CEO Changpeng Zhao.


But so far, LUNA holders seem ok with Kwon's plan to fork the chain and airdrop new tokens. About 80% of voters support the proposal, while 14.8% voted against and vetoed it.


But here comes the next question mark. While Do Kwon posted the poll on Twitter, users posted screenshots of the poll saying that when it was released, over 11 million users already clicked "yes" and none clicked "no."


Some claim that bots were used to rig the election, but again this is pure speculation and one can only guess how the votes were collected when the "voting" began. We look forward to the further development of UST and LUNA and hope that investors who have lost money will still be compensated in some way.

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