Since UST broke its peg on 9 May 2022, it underwent a death spiral and could not recover, dragging down the price of LUNA, wiping out billions from the ecosystem.
Many have seen their portfolios drawdown drastically while others have their capital stuck in Anchor as UST crashed below $0.10. Since then, there have been news of legal action in Korea against Do Kwon and the LFG. The repercussions are likely to affect the wider crypto industry as well.
Here, we hope to compile what had happened after UST broke its peg and LUNA had crashed below $0.0001 (for context, it’s all time high was $119), what current LUNA and UST bag holders can potentially look forward to…and whether it is sufficient to recover some of our losses.
Note: there are a lot of grey areas, conspiracy theories and finger pointing going on in the space, I will not touch on those here. The situation is still unfolding, some facts might change in a short span of time. While we’ll try to keep this up to date, you should stay ahead of the news as well. I list some resources below.
Terra 2.0: what is it?!
After failing to defend the peg or saving LUNA from its crash, Do Kwon made the proposal (Proposal 1623) to revive the ecosystem on 17 May 2022. In a nutshell, he proposes to:
- Create a new Terra chain without the algorithmic stablecoin.
- LUNA token will be airdropped to Luna Classic (LUNC) (the old chain) stakers and hodlers as well as residual UST holders and essential app developers.
- Terraform Labs and Luna Foundation Guard will not receive the tokens.
- (the new) Terra will be a fully community owned chain.
On 25 May 2022, the proposal was voted to pass.
For more details, here’s the twitter thread from @terra_money:
When will Terra 2.0 be launched?
A post-attack snapshot of holders is likely to take place on block 7,790,000 which is estimated to take place around Thu 26 May 2022 16:20:00 UTC (~12.20am Friday in Singapore).
The Genesis of Terra 2.0 will take place on 27 May 2022 28 May 2022. Here’s the update (click to read the twitter thread that covers more FAQs on the airdrop:
There would be about 116.7M of the new Terra Token, LUNA, which will be distributed to:
- Community pool: 30%
- Pre-attack $LUNA holders: 35%
- Pre-attack aUST holders: 10%
- Post-attack $LUNA holders: 10%
- Post-attack $UST holders: 15%
Update: Terra 2.0 is live.
How to check how much Terra2.0 or LUNA airdrop I got?
If you had tokens held in Terra Station, there are two ways to check.
i) Via Terra Station Desktop / Mobile app
You can access your wallet to check how much tokens you were airdropped. Make sure you’re under the mainnet. To do so, in your Terra Station app, click on the globe icon at the top right corner and select mainnet:
Do note that the network change can only be done on the Terra Station desktop or mobile app. The function doesn’t seem available on the browser app at the point of update.
i) Via Terra Finder
If your Terra wallet is accessible only via a hardware wallet, you can use Terra Finder to check your airdrop status.
- Go to Terra Finder
- Enter your Terra wallet address (make sure you’re under the mainnet as well)
- You should be able to see your liquid tokens and vesting amounts along with the vesting dates
Are you eligible?
Now comes the most important question, will you be able to get some if you were affected?
You’re eligible for the new LUNA airdrop if:
- You hold LUNA before 7 May
- You hold less than 500k UST in Anchor (aUST) before 7 May
- You hold LUNA after post attack snapshot (likely 26 May 2022, 16:20:00 UTC)
- You hold UST after post attack snapshot (likely 26 May 2022, 16:20:00 UTC)
How much you’re eligible for will depend on a few factors:
- which token you held
- how much you held,
- where you held the tokens
The above will be taken into consideration during the two snapshots.
Your tokens will be airdropped to you over time. This was implemented to reduce the impact of people dumping their LUNA. Here’s the vesting timeline:
At this point, you’ll probably have more questions. I’ve tried my best to gather the likely answers from Twitter, forums and within the proposal discussion to answer the following section. Disclaimer: many of the following are still up for debate, the final outcome may vary.
“What if I have UST stuck in Anchor?”
You’re eligible for the Luna airdrop if you hold less than 500k UST in Anchor (aUST) before 7 May.
“What if I have UST on other saving platforms?”
This is where it gets gray. The saving platform’s wallet might be able to get some Luna airdrop, capped at 500k. Whether or not they decide to distribute all their airdrops to users, is their call.
For example, Hodlnaut has released updates,
“Hodlnaut will be sharing the airdrop with affected users. However, we are uncertain of the exact amount that we are slated to receive, thus we are unable to provide further information of the amount to be distributed. ”
“What if I have LUNA staked on Terra Station?”
You’re eligible for the Luna airdrop on your LUNA holdings based on the pre-attack and post-attack snapshots.
“What if I have LUNA on my centralised exchange (CEX) accounts / wallets?”
UST and LUNA in CEX the following CEXs are supported in the airdrop:
But this is also where it gets gray. Given the vesting period, whether or not they’ll distribute to you and how much, is their call. You should check for updates with your CEX.
If you’re using Kucoin…
Kucoin has announced that they will support the LUNA airdrop. They will be taking snapshots and will be releasing more updates along the way. You can check this page for updates.
If you’re using crypto.com…
Crypto.com has also announced their support for the airdrop, and have stated that “All existing LUNA allocation on Crypto Earn will be automatically converted to LUNC.” You can check this page for updates.
If you’re using Gemini…
Gemini has been pretty quiet on the airdrop, which is quite disappointing. The LUNA on Gemini is on the ERC20 chain, it is unlikely that they would distribute airdrops at the moment. They have limited trading on LUNA and UST since 20 May, making it difficult to bridge smaller holdings of LUNA and UST out:
When will you get your LUNA?
The first airdrop will happen at Genesis, which is 27th May 202228 May 2022.
If you meet the above eligibility criteria, you’ll receive 30% of the Luna airdrop. (Unless you’re a whale, then you’ll get your 30% 1 year later).
You’ll get the next instalment of Luna at least 6 months later.
In the meantime, the Luna tokens will be staked to help preserve network security. And you’ll earn staking rewards on your vesting Luna tokens.
Will it cover our losses?
In short, no.
Firstly, at the point of writing, it seems only 116.7M new Luna tokens will be available at Genesis and all these will be distributed to Terra Classic holders accordingly. This means you’ll likely get a small share.
Secondly, this episode has killed confidence in Terra and it will take the community a while to rebuild if that is even possible. (But who know, maybe people would have forgotten about this by the next bull run and your new Luna token might be worth something then.)
You’ll also have to consider the vesting period as shown in Table 3, it would take at least 2 years for you to receive 100% of your eligible tokens.
Where to stay up-to-date?
As mentioned above, while we’ll try to keep this up to date, you should stay ahead of the news as well. Here’re some places to start:
- Terra Revival Plan Proposal details and discussions
- Proposal and Voting Results for Proposal 1623 on Terra Station
- The Terra 2.0 Luna Airdrop summary on Medium
- Luna Airdrop calculation
Twitter Accounts:
- Official Twitter account of Terra
- Do Kwon’s Twitter account
- @Fatman (an anon account providing counter arguments and risks analysis, good to read to understand both sides of the story)
If you have additional insights, share your thoughts in the comments below!
Or, if you’re curious about cryptocurrencies but want to explore it safely, join us at our upcoming crypto 101 masterclass.