Major validator calls for ‘completely new chain’ to replace Terra

Published at: May 16, 2022

As the dust settles from the Terra ecosystem crash and the community decides what the next steps should be, the CEO of a validator runner in South Korea thinks the old Terra chain should be shut down permanently.

Jiyun Kim, CEO of blockchain solutions company DSRV, wrote an opinion post on his own behalf, detailing how the Terra team tip-toed around the idea of halting block production while Terra (LUNA) prices crashed and its TerraUSD (UST) stablecoin was depegged. He now urges validators in the Terra ecosystem to reject a hard fork in favor of a brand new community-driven blockchain.

DSRV runs a validator node on Terra with 9.36% of the on-chain voting power. DSRV has suffered as much as any investor because its node had collected 14 million LUNA, worth about $1 billion by May 8, which is now worth about $3 million.

Kim wrote that the decision to halt the chain on May 12 was not taken lightly by the Terra Validator League, which was renamed the “Terra Rebirth League.” However, he said the Terra team failed to give the proper notification using the word “Confirm” to actually confirm with all validators that they should halt the chain, which left him feeling “betrayed.” He wrote:

“And the announcement that they made [made it sound like] the chain restart was originally the validator’s opinion. YES, they didn’t use the term ‘Confirm.’”

Terra founder Do Kwon proposed reconstituting the chain and resetting token supply to 1 billion LUNA on Friday. Kim appears to completely disagree with Kwon as he wrote in his post that re-using the Terra chain “is completely making Terra chain’s internal value to 0:”

“The previous Terra chain should permanently vanish. And a completely new chain driven by the community should [be made to] save the Lunatics.”

There may be more to the story, as Kim wrote in his post that validator league control has been relinquished to the community, giving a semblance of decentralization, which could potentially protect the Terra team from further legal burdens. He wondered if the project is preparing to deal with imminent legal hurdles by asking, “maybe this can be used to mitigate their legal risk?”

Wu Blockchain tweeted on Saturday that a resident of Singapore has already filed suit against Do Kwon for UST and LUNA investors.

A user on reddit claimed to have sent a police report have been made against Do Kwon, on behalf of UST and Luna investors. He said at least 1,000 Singapore citizens have invested in Luna and UST. https://t.co/eIQ9AGul4T https://t.co/YzPf8iWHI7

— Wu Blockchain (@WuBlockchain) May 14, 2022

Kim told Cointelegraph on Monday that he wants to “save the community” but that there is no major coordinator in victim support efforts “because there are still legal issues there:”

“I’m not a hero, but I really want to save people.”

On May 8, a sell-off of UST tokens sparked a panic, ultimately leading to the price of LUNA to fall from $73 to a minuscule $0.000000999967 on Friday, according to CoinGecko. UST is still catastrophically depegged from the dollar, trading at $0.16, while LUNA is virtually worthless, trading down 30.8% over the last 24 hours at $0.00026619.