hard fork

“Burn LUNA” hashtags continue to gather steam on Twitter even as Terraform Labs creator Do Kwon made his intention clear to go ahead with the on-chain governance proposal despite the majority voting ‘No’ in the online poll.

On 16th May, Kwon proposed the hard fork that would split into two chains: Terra and Terra Classic. The new, non-classic chain would abandon the failing UST stablecoin and instead focus on decentralized finance (DeFi) applications building on Terra, as TronWeekly reported. 

Kwon posted a call to action as part of yesterday’s announcement: “We encourage Terra developers to signal support [and] commit to building on the fork on public channels,” he wrote.

Over a dozen validators voted in support of the fork of Terra that focuses on development rather than its stablecoin. However, results from the preliminary poll indicated that many community members were against the idea.

More than 90% of 6,921 voters on a previously held online poll have voted down the change, with the most popular responses calling for “no fork.”

Fork Or Burn. What Do Experts Say?

The most trending crypto hashtags called for burning LUNA as many in the community felt the token can be salvaged by buying up the circulating supply and then burning it down.

Leading fund managers were skeptical saying that Terra’s senior team would push for forking the blockchain irrespective of the community’s sentiment toward the project. Doo Wan Nam, founder of crypto fund Stable Node said,

“It’s a dilemma for Kwon and Terra’s team as they can technically override the community’s consensus by either forking regardless of the decision or using their staked Luna [to prevent the network from being manipulated] to change the voting to support.”

“This will be received very poorly by not only the Terra community but the wider crypto community. However, Do and his team might not have much choice but to do it to better reflect his vision of the Terra ecosystem,” Doo added.

On the other hand, Terra’s woes refuse to end as reports emerged of possible legal action by a South Korean law firm. LKB & Partners will reportedly file the case against Kwon, a Korean national, on behalf of ordinary investors to the Seoul Metropolitan Police Agency, according to a local news outlet.

Determined to pull the Terra ecosystem out of its current plight, founder Do Kwon laid out a new “Revival Plan” asking developers to support & commit to building on the fork without the algorithmic stablecoin. including LUNA token.

Calling UST peg failure as a “chance to rise up anew from the ashes”, Kwon put a brave front saying that the ecosystem and its community deserve another chance.

“It would be devastating for broader crypto adoption and advancement if we remain in entropy amidst opposing views, and as such, I propose the following to chart the path forward for our ecosystem,” he tweeted.

In the follow-up thread, the creator proposed forking Terra into a new chain named “Terra” [token Luna – LUNA], and the old chain would be called “Terra Classic” [token Luna Classic – [LUNC]. “Both chains will coexist”, he added.

“New LUNA will be airdropped to LUNC stakers, holders, residual UST holders, and essential app developers.”

Kwon also revealed that the foundation behind the ecosystem-TFL’s wallet will be removed from the airdrop, making the project a fully community-owned chain.

Besides that, TFL will be initiating a governance proposal, with Kwon promising that the voting would start on May 18. According to the timeline published in the revival plan, the new network launch could come as soon as May 27.

Terra’s Fork Generated Mixed reactions

Crypto Community’s Sentiment appeared to be mixed toward the proposal.

While some cheered, others felt instead of airdropping new LUNA tokens to UST holders, it would be good to deploy TFL funds to provide relief to small UST holders.

One of them even asked to ditch the hard fork and opt for the buyback and burn course. Interestingly a few days back, Binance CEO CZ was the one to suggest the burn option to reduce supply and “not fork at an old date”.

Shortly after the announcement, Terra’s LUNA has lost nearly a quarter of its value in the past 24 hours.

The token has shed more than 99% since April’s peak of nearly $120. The massive drop was due to excess LUNA circulation last week to prevent the collapse of terraUSD (UST).