More On: luna
After clearing the vote, a proposal to re-enable IBC to free hundreds of millions of UST that are locked in protocols failed to execute.
The proposal 1299 to (re)enable IBC was approved with a 95 percent "Yes" vote and a 0.01 percent "No" vote over the weekend. Nonetheless, similar to a prior plan to burn the community UST pool, this proposal "failed to execute owing to technical problems."
1/ Prop 1299 to (re)enable IBC has passed but did not successfully execute due to technical issues. Namely, the proposal attempted to enable IBC transfers which were already enabled 🧵. pic.twitter.com/mCgZyxu7O2— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 23, 2022
Prop 1299 is another another failure in a growing litany of governance issues on Terra.
IBC, which stands for Inter-Blockchain Communication, is "an open-source protocol for conveying messages between independently distributed ledgers" that was developed to connect separate blockchains.
The community recommended re-enabling IBC on Terra in order to free more than $150 million UST encumbered in certain protocols. According to the proposal:
“Terra validators disabled IBC as a stop-gap solution to preventing Impermanent Loss on UST and LUNA pools on Osmosis and other IBC DEXs. Unfortunately, this also prevents UST and LUNA from transferring between chains. Currently, about 154.7M UST is stuck in Osmosis alone.”
Terraform Labs tweeted:
2/ During $UST’s depeg, IBC channels were closed (but not disabled) as a stop-gap measure to prevent impermanent loss being incurred on $UST & $LUNA pools on @osmosiszone & other IBC DEXs. As a result, users were then unable to transfer these assets across IBC chains.— Terra 🌍 Powered by LUNA 🌕 (@terra_money) May 23, 2022
Since the tweet, there have been no more updates as the May 27 deadline for LUNA's new "genesis" chain approaches. Uniquely, the Terra.money website now displays a full-page advertisement for Terra 2.0.
The website is comparable to what one would anticipate from a project introducing a protocol update. The headline says "Terra 2.0 is Nearing Completion."
Terra is pushing version 2.0 in an effort to restore the ecosystem of blockchain developers. However, the new chain will not include UST, therefore LUNA will only serve one purpose: governance.
LUNA token holders will be able to vote on the path of the new chain, but they will not necessarily get incentives for holding the token. If the earn mechanism for Terra Classic is abolished, just on-chain governance remains.
In the last days of Terra Classic, two prominent suggestions were approved but failed to be implemented owing to "technical problems." Such flaws cannot inspire trust in investors or developers and raise fundamental doubts about the new chain's future.
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