LUNA 2.0 Stakers Will Decide On The Future Of Luna Classic

The governance system of LUNA 2.0 is being used to decide the future of the Luna Classic successor chain.

Instead of using on-chain governance on the Luna Classic, the decision to reactivate the IBC on it is being made through the LUNA 2.0 governance system. The new proposal states:

“The current state of TerraV1 governance is controversial. This is a “new” way of consulting the Terra community, made up of two snapshots and representing the stakeholders of the legacy Terra chain.”

The Terra PFC validator has confirmed the proposal can be completed on Luna Classic. However, it “costs 1c and is flooded with spam”. Therefore, it seems that governance is implemented on LUNA 2.0 due to a loss of confidence in Luna Classic’s governance capabilities.

If IBC is reactivated, the chain will be able to unlock tokens that are currently trapped in other chains. IBC is the protocol used for independent blockchains to communicate with each other.

“IBC channels between TerraClassic and Osmosis/Juno/Crescent were forcefully switched to CLOSED as part of the Terra core software v0.5.20 upgrade,” Larry0x, a Delphi Digital engineer, revealed.

According to the PFC, the proposal to administer Luna Classic through LUNA 2.0 is “optional”. The vote seems to be centered around a guide to gauge the support of the LUNA 2.0 community, which is mainly comprised of LUNC holders due to the airdrop. Furthermore, if changes to LUNC were made as a result of the vote on LUNA 2.0, it would likely invalidate LUNC’s entire system of governance.

IBC reactivation was a key part of the debate between Terraform Labs and validators at the chat on May 12. However, the protocol remains offline as of June 4, and millions of dollars worth of tokens remain locked in the bridge asset.

There is also the possibility of a re-vote for Luna Classic similar to a vote to burn the remaining UST in the community pool. The fact that Luna Classic cannot successfully operate the administration system is very worrisome. Several updates have failed due to technical issues and other reasons over the past few weeks.

The chain cannot succeed without successful self-governance. However, as the PFC stated, the chain should be given the chance to “live or die”. The proposal to reactivate the IBC will be the first to pass on LUNA 2.0 – however, it is not related to the administration of LUNA 2.0 but rather Luna Classic.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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