Terra Revival Plan Approved: 10 Key Facts About the New LUNA Token and Ecosystem

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The long-anticipated Terra revival plan, formally known as Proposal 1623 (Prop 1623), has officially passed community voting with strong support. Spearheaded by Terra founder Do Kwon, this marks a pivotal moment in the blockchain’s recovery journey following the 2022 collapse. With over 81% of LUNA holders participating and 66.51% voting in favor—surpassing the required 50% threshold—the proposal clears the way for a fresh start.

But what does this mean for current and former holders? What changes are coming? And how will the new ecosystem differ from the old? Below, we break down the 10 most critical aspects of the Terra revival plan, covering everything from tokenomics and distribution to chain architecture and future development.

🔁 A New Chain, Not a Hard Fork

One of the most important clarifications is that the Terra revival is not a hard fork of the existing blockchain. Instead, it involves launching an entirely new blockchain, simply named Terra, with its native token being LUNA.

The original chain will continue to operate under the name Terra Classic, with its token now called Luna Classic (LUNC). Importantly, the two chains will not share historical data or transaction records. This clean break allows the new Terra to reset without inheriting past vulnerabilities.

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A major design shift? The new Terra will not include a algorithmic stablecoin like UST at launch. This deliberate omission reflects lessons learned from the 2022 depegging crisis, prioritizing network stability before reintroducing complex financial instruments.

🪙 LUNA Tokenomics: Supply, Inflation, and Distribution

The new LUNA token will have a total supply of 1 billion tokens, distributed through a structured airdrop mechanism aimed at compensating affected users and incentivizing ecosystem growth.

To ensure long-term security, the network will implement an annual inflation rate of 7%, used primarily to reward validators and secure the proof-of-stake consensus.

Tokens will be allocated across several key groups based on snapshots taken before and after the May 2022 crash:

This distribution aims to balance fairness with sustainability, rewarding early supporters while reserving significant resources for future development.

📦 Airdrop Mechanics and Initial Liquidity

Understanding when you can access your tokens is crucial. Here's how unlocking works across different groups:

Pre-Collapse LUNA Holders

aUST, Post-Collapse LUNA & UST Holders

All receive:

Community Pool (300 million)

Based on these rules, estimated initial circulating supply totals approximately 361.77 million LUNA, ensuring enough liquidity at launch without overwhelming the market.

📅 Snapshot Date Confirmed

The official snapshot for eligibility will occur at block 7,790,000 on Terra Classic, expected around May 26, 2025, at 16:20 UTC+8 (Beijing time).

⚠️ As of now, most major exchanges have not announced support for this snapshot. Therefore, users holding LUNA or UST on centralized platforms are strongly advised to withdraw their tokens to a self-custody wallet before the cutoff to ensure eligibility for the airdrop.

🧩 Governance and Community Control

In a move toward decentralization, Do Kwon confirmed that the Terraform Labs (TFL) wallet will be excluded from the airdrop whitelist. This ensures the new chain is truly community-owned rather than controlled by its founding team.

This decision is significant: had TFL participated, it could have claimed nearly 110 million new LUNA tokens based on its holdings of ~3 billion LUNC and over 3 million UST.

Similarly, the Luna Foundation Guard (LFG) wallet, which still holds about 2.3 billion LUNC and 1.85 billion UST, is set to receive around 25 million new LUNA. While some community members proposed excluding LFG from rewards, the motion did not gain traction.

Notably, LFG previously pledged to prioritize compensation for small UST holders but has yet to release a clear implementation framework—raising ongoing concerns about accountability.

🔁 Application Migration and Ecosystem Revival

The new Terra chain will launch as a blank slate—no pre-existing DApps or assets from Terra Classic will carry over automatically. Developers must actively migrate their projects.

Several major protocols have already committed to transitioning:

Others have chosen alternative paths, rebuilding on Ethereum or other Layer 1 blockchains.

Importantly, Terra Classic is not being abandoned. It will continue running with active validators, and there’s no official statement suggesting complete discontinuation of support.

⚠️ Common Misconceptions and Warnings

Some community members have attempted symbolic gestures—like sending LUNA tokens to burn addresses—to protest or influence outcomes. However, Do Kwon has publicly warned that such actions serve no functional purpose other than causing personal financial loss.

Additionally, efforts like Prop 1188—aimed at burning residual UST in the community pool to boost airdrop value—failed due to technical flaws. A revised version (Prop 1747) is currently under vote but hasn’t reached the 50% approval threshold as of the latest count. With voting ending soon, it remains uncertain whether it will pass before the snapshot date.

💡 Lessons Learned: Risk Awareness and Portfolio Diversification

The UST depegging event was more than a market crash—it was a wake-up call for the entire crypto industry. It highlighted the dangers of overreliance on algorithmic mechanisms and unsustainable yield models.

For investors, the takeaway is clear:

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❓ Frequently Asked Questions (FAQ)

Q: Is the new LUNA the same as LUNC?
A: No. The new LUNA exists on a separate blockchain called Terra. LUNC is the token of the legacy chain, now known as Terra Classic.

Q: Do I need to do anything to receive my new LUNA tokens?
A: Yes. If your tokens are on an exchange that doesn’t support the snapshot, withdraw them to a personal wallet before block 7,790,000 on Terra Classic.

Q: Will UST return on the new Terra chain?
A: Not at launch. There are currently no plans to reintroduce an algorithmic stablecoin immediately.

Q: Can I stake my new LUNA tokens?
A: Yes. The network uses proof-of-stake with an initial inflation rate of 7%, allowing stakers to earn rewards.

Q: Why exclude TFL from the airdrop?
A: To ensure true decentralization and community ownership of the new chain.

Q: What happens to apps that don’t migrate?
A: They’ll remain on Terra Classic. Users must follow individual project announcements for migration details.

🔍 Core Keywords Integrated:

The approval of Prop 1623 signals more than technical rebirth—it represents a second chance built on transparency, caution, and community-driven governance. While challenges remain, the path forward is now clearer than ever.

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