The Terra revival plan, formally known as Prop 1623 and proposed by Terra founder Do Kwon, has officially passed community voting with over 81% participation from LUNA holders. With 66.51% in favor—surpassing the required 50% threshold—the proposal marks a pivotal moment in the blockchain’s recovery journey.
This new chapter for Terra is not a hard fork of the existing chain but the creation of an entirely new blockchain ecosystem, signaling a fresh start while preserving lessons from the past. Below, we break down the ten most critical aspects of the Terra revival plan to help investors, developers, and community members understand what lies ahead.
1. A New Chain, Not a Fork: Introducing Terra and Terra Classic
The revival plan does not involve forking the current Terra network. Instead, it introduces a brand-new blockchain named Terra, with its native token called LUNA. The original chain will continue to operate under the name Terra Classic, with its token now known as Luna Classic (LUNC).
Importantly:
- The new Terra chain will not share historical data with Terra Classic.
- There will be no algorithmic stablecoin UST on the new chain at launch.
- This clean break allows the new ecosystem to rebuild trust and security independently.
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2. LUNA Tokenomics: Supply, Inflation, and Incentives
The new LUNA token has a total supply of 1 billion, designed to support long-term network sustainability through controlled inflation. The annual inflation rate is set at 7%, primarily used to reward validators and secure the network.
This model emphasizes decentralization and security, aligning incentives across stakeholders. Additionally, a significant portion of tokens will be distributed via airdrops to various affected groups, ensuring fair reintegration into the ecosystem.
3. Airdrop Distribution: Who Gets What and When?
One of the most anticipated elements of the revival plan is the airdrop allocation. Based on pre-attack (May 7, 2022) and post-attack snapshots, here's how the 1 billion LUNA tokens are allocated:
Community Pool – 30% (300 million)
- 20% (200 million): Controlled by governance; no lock-up period — considered part of initial liquidity.
10% (100 million): Reserved for developers.
- 0.5% (5 million): Emergency allocation, released immediately after launch.
- 9.5% (95 million): Subject to gradual unlocking.
This results in 250 million LUNA available as initial circulating supply from this pool.
Pre-Collapse LUNA Holders – 35% (350 million)
Distribution varies based on holdings:
<10,000 LUNA: 6.45% of total holders receive ~22.57 million tokens.
- 30% unlocked at genesis (~6.77 million).
- Remaining unlocked over 2 years after a 6-month cliff.
- 10,000–1 million LUNA: 1-year lock-up, then linear unlock over 2 years.
- >1 million LUNA: 1-year lock-up, then unlock over 4 years.
Initial liquidity from this group: ~6.77 million LUNA.
aUST Holders – 10% (100 million)
- 30% unlocked at genesis (30 million).
- Remaining 70% unlocked over 2 years after a 6-month lock-up.
Post-Collapse LUNA Holders – 10% (100 million)
- Same unlock schedule: 30% at genesis (30 million), rest over 2 years post-6-month lock.
UST Holders After Collapse – 15% (150 million)
- 30% unlocked at genesis (45 million), remainder over 2 years after lock-up.
✅ Total Initial Circulating Supply: Approximately 361.77 million LUNA
4. Snapshot Timing: How to Qualify for Airdrops
The official snapshot for the new chain will occur at block 7,790,000 on Terra Classic, estimated to happen around May 26, 2025, at 16:20 UTC+8.
To ensure eligibility:
- Users holding LUNA or UST after the collapse should transfer tokens to a non-custodial wallet (e.g., Terra Station).
- Most centralized exchanges have not confirmed support for the snapshot.
- Failure to self-custody before the snapshot may result in missing out on airdrops.
5. Exclusion of TFL Wallet: Reinforcing Decentralization
In a move toward full community ownership, Do Kwon confirmed that the Terraform Labs (TFL) wallet will be excluded from airdrop eligibility.
This decision carries significant implications:
- The TFL wallet holds about 300 million UST and 3 billion LUNC.
- If included, it would have qualified for nearly 110 million new LUNA tokens.
- Its removal reinforces decentralization and prevents concentration of power.
6. Status of LFG Wallet and Community Compensation
The Luna Foundation Guard (LFG) wallet still holds substantial assets:
- ~1.85 billion UST
- ~2.3 billion LUNC
Despite this, it qualifies for only 25 million new LUNA tokens under current rules.
Some community members proposed removing LFG from the airdrop list altogether, but the motion failed. While LFG previously pledged to prioritize compensation for small UST holders, no concrete plan has been implemented—sparking ongoing debate about fairness and accountability.
7. Failed Attempts to Boost UST Holder Rewards
A prior proposal (Prop 1188) aimed to increase rewards for regular UST holders by:
- Destroying residual UST in the community pool.
- Redirecting cross-chain liquidity incentives to benefit retail users.
Though passed, technical issues prevented execution. A revised version (Prop 1747) is currently under vote but has not reached the 50% approval threshold with limited time remaining before the snapshot.
If unsuccessful, the original distribution framework will stand.
FAQ: Common Questions About the Terra Revival Plan
Q: Will my LUNC automatically convert to LUNA?
A: No. The new LUNA is a separate token on a new chain. You must qualify via airdrop based on your holdings during specified snapshots.
Q: Can I still stake LUNC after the revival?
A: Yes. Terra Classic remains active with validators continuing operations. Staking LUNC is still possible.
Q: Is there a new UST stablecoin on the new chain?
A: Not initially. The new Terra chain launches without an algorithmic stablecoin to reduce systemic risk early on.
Q: What happens to DApps built on Terra Classic?
A: They must migrate manually. Projects like PRISM, Stader Labs, RandomEarth, and OnePlanet have committed to moving to the new chain.
Q: Should I send my tokens to a burn address?
A: No. Do Kwon has warned that burning LUNC serves no purpose other than personal loss of funds.
Q: How can I prepare for the new chain launch?
A: Move your eligible tokens to a self-custody wallet before the snapshot deadline and monitor official channels for bridge and wallet setup instructions.
8. Application Migration and Ecosystem Transition
The new Terra chain starts fresh—no DApps or assets from Terra Classic are automatically ported over.
However, several major projects have announced migration plans:
- PRISM: Decentralized exchange
- Stader Labs: Liquid staking protocol
- RandomEarth: NFT marketplace
- OnePlanet: Multi-chain DEX
Others have chosen alternative platforms like Ethereum or Cosmos due to uncertainty or strategic shifts.
Terra Classic will continue running independently—no official abandonment has been declared.
9. Beware of Symbolic Token Burns
Some community members have sent LUNC tokens to burn addresses in protest or symbolic gestures. Do Kwon has publicly cautioned against this practice:
“Sending tokens to burn addresses does nothing except cause personal financial loss.”
These acts do not influence governance outcomes or increase value proportionally—making them economically irrational.
10. Lessons Learned: Risk Management in Crypto Investing
The UST depegging event serves as a stark reminder:
- High-yield returns often come with hidden risks.
- Overreliance on algorithmic mechanisms without sufficient collateral proved catastrophic.
- Portfolio diversification is essential—never invest more than you can afford to lose in any single asset.
Investors should prioritize transparency, audit history, and sustainable economic models when evaluating blockchain projects.
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Final Thoughts: A New Beginning Built on Resilience
The approval of Prop 1623 represents more than just technical reconstruction—it reflects a community determined to rebuild responsibly. With clear token distribution, developer incentives, and exclusion of centralized control points, the new Terra aims to restore credibility while embracing decentralization.
While challenges remain—especially regarding trust restoration and ecosystem growth—the foundation is set for a more resilient future.
Whether you're a former holder seeking redemption or a developer exploring new opportunities, now is the time to engage thoughtfully with the evolving landscape.
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