On Monday, the developers of the Terra ecosystem, consisting of Luna Classic (LUNC) – formerly known as Terra (LUN, TerraUSD (USTC), and Luna 2.0 (LUNA), proposed a revised expansion program to allocate 95 million LUNA ( $248 million). As explained by Terra, the new proposal is designed to encourage development in the Terra ecosystem and solve the problems of the original proposal.
In the original plan, around 10% of the total LUNA supply, or 100 million LUNAs, would be allocated to the ecosystem, with 80% of this amount going to developer mining rewards. Nevertheless, Terra staff explain that there are only a handful of projects with full value locked into the protocol, and that lack of competition would not result in a proper distribution of mining revenue.
According to the new proposal, mining rewards for developers they would decrease from approximately 80 million MOON to 20 million MOON. On the other hand, 50 million LUNA would be reallocated as liquidity mining rewards to incentivize the construction of decentralized exchanges in the Terra ecosystem. Another 20 million LUNA would be given as developer grants, with a maximum amount of 125,000 LUNA received per project per year. Finally, 5 million LUNA will be given to users to encourage traction.
1/Attention #LUNAticsa new proposal has just been posted on Agora outlining a new ecosystem expansion program – The Terra Expedition https://t.co/wW92766GXj
— Terra Powered by LUNA (@terra_money) October 17, 2022
A seven-member committee made up of TerraForm Labs (TFL) employees, community leaders, and outside experts will oversee the allocation of funds. The appointment period will be one year, and non-TFL group employees will receive monthly compensation of 1,000 LUNA. Although committee members will vote to decide on funding proposals, the committee itself will have discretionary authority over the allocation of funds.
In the meantime, the treasury will be managed by a separate group consisting of two validators, two community members and three TFL members.. A few months earlier, the Terra Luna ecosystem suffered a devastating $40 billion crash, with the LUNC-USTC algorithmic currency pair spiraling out of control as part of a week of intense selling. Since then, the ecosystem has partially stabilized, but remains well below its pre-collapse market valuation. According to DefiLlama, Luna’s TVL currently stands at USD 51 million.
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