What Comes Next for Terra Ecosystem?

A group of dApp developers in the Terra ecosystem, calling themselves the “Terra Builders Alliance” have put forward a rough outline of a proposal to relaunch the project, “to honor existing UST holders, loyal Luna holders, and developers,” according to a forum post. Terra founder Do Kwon has weighed in to support a similar framework.

Other groups are considering moving apps built on the Terra chain over to other smart contract blockchains built using the same architecture. 

The Terra Builders Alliance proposal, which has not yet been formally submitted to governance for a vote, calls for a “new luna” to be minted and distributed primarily to LUNA stakers prior to the depegging of UST, as well as those UST holders that remain so up until the new network launch. The normal governance system which relies on on-chain voting is flooded with proposals, many of which have no votes yet, so it’s unclear how the community will achieve consensus on a course of action.

The proposal is the work of four prominent dApp developers on Terra — Nexus, Apollo, Astroport and Mars — however, notably absent from the list is Anchor, where the vast majority of economic value on the network is stored.

“Once the UST has been swapped with LUNA at the new network launch, it will cease to exist in its current form and will be relaunched after genesis in collateralized form,” the proposal states.

Unspecified is what, if any, role Terraform Labs and its CEO Do Kwon would play in this plan. A TFL spokesperson did not immediately reply to Blockworks’ request for comment.

But Kwon subsequently posted a similar “revival plan” of his own, calling for the abandonment of UST.

“While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role,” Kwon said in the Terra forum post, adding, “while UST has been the central narrative of Terra’s growth story over the last year, the Terra ecosystem and its community is what is worth preserving.”

He calls for “reconstituting” the chain, resetting LUNA’s circulating supply and distributing it primarily to LUNA and UST holders prior to the depeg.

Aside from launching an entirely new network, the community may consider moving its work to another smart contract blockchain — Juno — built using the Cosmos SDK, with dApps written in CosmWasm, just like Terra. The leaders of Juno are laying the groundwork for a community fund that would encourage Terra’s many dApp developers to migrate their wares over.

Another Cosmos chain that could implement permissionless CosmWasm dApps is Osmosis, known primarily as the home of the largest decentralized exchange in the Cosmos ecosystem. Co-founder Sunny Aggarwal floated the idea on Thursday in an informal Twitter poll, although early results indicate his followers are overwhelmingly against a change away from the chain’s current, “governance-gated” dApp strategy.

In the short term, there are countless stories surfacing on social media platforms of heartbreak and loss connected with this unprecedented and sudden collapse.

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Community members are gathering in various forums to share grief, counsel, and express anger and frustration.

Meanwhile, Do Kwon may also be fearing for his safety, according to local Korean media, after a stranger rang the doorbell to his house, asked if he was home, and then fled.

In summation to his latest plan, he gave no sign of leaving the project and instead struck a hopeful note.

“The rallying cry for the Terra community has always been, ‘a decentralized economy needs decentralized money’. This is an exciting vision, and while UST has not been successful, the Terra community will find ways of iterating on the idea at some point in the future.”

This story was updated on May 13, 2022 at 1:28 p.m. ET.