Terra developers floated a new proposal earlier this week as they look to revive the once-mighty network, even as Do Kwon, the platform's controversial co-founder, faces a warrant for his arrest on charges of fraud. Authorities have been searching for Kwon since last month, but he has denied that he is on the run.
Termed the “Terra Expedition,” the proposal is a revised version of the developer mining program and developer alignment program that were established when the Terra network started.
The majority of LUNA tokens must be voted in favor of the proposal before it can go into effect.
The new program would be funded with 9.5% of the total supply of LUNA tokens that was earmarked at the launch of a new Terra blockchain. (A new Terra blockchain was started earlier this year after the original network and its two related digital tokens imploded in May.)
The incentive program for the new network would run for four years and be managed by a community-elected committee that will evaluate the plan every 12 months.
The proposal aims to better align incentives across the network and to attract developers, get new users onboard and promote liquidity.
“The Terra Expedition is a four-year program aimed at growing the Terra ecosystem through a series of initiatives with three main objectives, namely: incentivizing developers to build on Terra, deepening liquidity on Terra and onboarding users to Terra,” the proposal read.
LUNA incentives via different programs
Of the allocation, 20 million LUNA tokens are earmarked for a developer grants program. Developers of different apps will be paid upon a successful audit and project launch on Luna's main network. Some examples of projects pointed out in the proposal include decentralized exchanges, lending protocols, stablecoin issuers and derivatives protocols.
Projects will also be eligible for up to $40,000 in reimbursements for their smart contract audits. Crypto security remains a sore point in the world of blockchains: This month is already the worst ever for attacks and exploits in the history of cryptocurrencies.
Another 20 million LUNA tokens would be floated to reward developers building on Terra. Any project deemed “essential” by the community – which has launched an app on Terra's network – would qualify. The tokens are scheduled to be distributed every quarter, the proposal stated.
A liquidity mining incentive scheme of 50 million LUNA tokens, which would be distributed over four years, has also been proposed. These funds would be used to fund the initial liquidity of decentralized exchanges, stablecoins, bridges and other similar protocols built on Terra.
Developers have also proposed to award five million LUNA to users to give them an incentive to use bridges and decentralized applications on the network and to mint non-fungible tokens (NFT) on the platform.
The original proposal earmarked a certain portion of the total LUNA supply to be distributed based on the value locked up on Terra-based protocols, but such an allocation would now “mainly benefit a few protocols,” and thus not have the intended effect of kickstarting the Terra ecosystem.
Terra-related applications lost $28 billion in value following the May implosion of Terra and its LUNA and UST tokens. As of this writing, Terra-based applications have only $40 million in locked value spread over seven protocols.
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