Terra's new blockchain will launch Saturday, followed by an airdrop of new Luna (LUNA) tokens to users as part of a broader plan to revitalize the Terra ecosystem, developers confirmed Friday.
"The community has been working around the clock to coordinate the launch of the new chain," Terra developers said in a tweet Friday morning. "Subject to possible changes, we expect Terra to go live at approximately 06:00 UTC on May 28, 2022."
A snapshot of the new blockchain, currently referred to as "Terra 2.0," took place earlier this week after a vote among network validators concluded with a 65% approval rate.
Holders of LUNA and terraUSD (UST), a stablecoin pegged to the U.S. dollar, are eligible to receive new LUNA tokens based on their previous holdings. This would theoretically allow old holders to recover some of their lost investment value while incentivizing them to use the new blockchain.
For example, wallets with more than 1 million LUNA or UST would have to wait more than a year before receiving tokens before decoupling the UST from the U.S. dollar, with a four-year lock-in period thereafter. New tokens will be automatically distributed to existing user wallets.
Popular applications on the current blockchain - which will continue as "Terra Classic" after Terra 2.0 launches - are expected to migrate to the new blockchain.
Separately, a vote was held Thursday on Terra's Proposition 1747 to burn 1.388 billion UST. The move reduced UST supply by about 11% from the current supply of 11.28 billion UST.
Terra's UST tokens experienced a bank run earlier this month, dropping token prices as low as 7 cents. This caused investors to lose confidence in the Terra ecosystem. LUNA token prices fell nearly 100% and Terra-based decentralized financial applications (DeFi) lost up to $28 billion in locked value.