by One of the most popular Ethereum-based DeFi protocols, Lido, has sparked a community discussion about whether or not to support Terra following its hard split. A community proposal backed by the official Lido team lays out 4 possibilities for users to consider when funding Terra to allow community voting eventually. The announcement comes as LUNA holders show increasing interest in a Terra hard fork that will form a new Terra blockchain.
Terra V2 would be devoid of the stablecoin UST, which contributed to Terra’s steep decline. Lido is among the most established and well-known DeFi companies. In terms of overall value locked, it presently ranks 3rd with $8.6B, based on DeFi Llama’s statement.
Lido Provides People With Four Scenarios on Terra
According to the plan, Lido on Terra V1 was a huge success, bringing in over $10B in total value locked in. However, it warns that embracing Terra V2 could put Lido at risk of governmental scrutiny and lack of acceptance.
That leaves the user four choices: either reject the reboot, accept tokens from blockchain builders but reject them all, reject the reboot and donate tokens to UST holders or accept tokens from blockchain builders and donate the rest. The suggestion points out that Terra’s community enthusiasm is certain to be zero following the disaster and that backing the relaunch could jeopardize Lido’s image.
Mixed Initial Reactions
The idea has received considerable negative tweets, with many people opposing Terra V2. Exposure to a probable Terra collapse, according to users, might further harm Lido’s community. Lido may not be able to recoup its investment in Terra V2 if there isn’t enough interest in the project.
However, the Lido ecosystems’ response to the idea was more supportive of Terra. Numerous responses favored the third alternative, arguing that the protocol would gain greatly if the restart was successful.
Validators and DeFi Apps Support Kwon
While certain holders and influencers spoke about their opposition to Terra’s hard fork, the proposal was getting traction from their developers. Even prior to the initiative being shown to a vote, every member of the Terra Builder Alliance had voiced aid for hard forking.
With Terra’s present reserves for reimbursing investors impacted by the crash is an option to forking, that’s being pressured by numerous big cryptocurrency players. In the aftermath of the catastrophe, it’s uncertain as to the amount of goodwill Terra has left. Do Kwon could face prosecution in South Korea.
