On May 28, 2022, Terraform Labs began the process of airdropping new LUNA tokens to holders of the old LUNA, now called Terra Classic (LUNC). In this guide, we’ll take a look at the particulars of the airdrop, plus the purpose and utility of LUNA 2.0.
LUNA Airdrop Details
According to Terra’s official documentation, the airdrop distribution was broken down into 5 different categories: community pool (30%), pre-depeg LUNA holders (35%), pre-depeg aUST holders (10%), post-attack LUNA holders (10%), and post-attack UST holders (15%).
30% of the airdropped tokens were made immediately available to both pre and post-attack LUNA and aUST holders at the start of the new Terra blockchain, while the remaining 70% is expected to be distributed over the next two years. The cliff and vesting periods are longer for those who held over 10K LUNA before UST’s de-peg.
That’s a lot of numbers and percentages, but the main takeaway is this: if you held LUNA or deposited UST into the Anchor protocol before the de-peg, or if you held LUNA or UST after the de-peg but before the post-attack snapshot taken on May 27th, you should have received a portion of the airdrop. The rest will be distributed over the next two years (four if you held over 1 million LUNA).
Medium user MC provided helpful tables for airdrop eligibility and the chains, bridges, and exchanges that were supported in their post about the Terra 2.0/LUNA airdrop.
However, the airdrop has not gone as smoothly as planned. Some users have reported not receiving the correct amount of tokens. This is after exchange listings and airdrops have been completed. Terra’s developers are aware of the issue and are working on a solution according to the official Terra Twitter account, though just what the solution will look like or any timeline is unknown.
LUNA 2.0 Purpose and Utility
The most immediate use of the new LUNA token will be for staking. All airdropped LUNA will automatically be staked to help secure the network. In addition, the vested LUNA that will be available to holders after the 6-month cliff will be staked as soon as it becomes available according to the vesting schedule detailed in the section above.
The secondary purpose of LUNA 2.0 is the potential rehabilitation of Terra’s image in the eyes of investors. A successful relaunch and airdrop could do wonders for a company (Terraform Labs) and an ecosystem that has a long way to go to recapture the trust of its users and a top-10 ranking among cryptocurrencies. Legal issues surrounding the collapse of UST/LUNA could make the rebrand easier said than done, however.
Unlike the original LUNA, now LUNC, there is no tie to a stablecoin like UST. The original model saw LUNA as collateral for UST and it was burned when demand for UST rose.
Without a stablecoin planned for the new Terra ecosystem, staking LUNA will be the primary use case for the immediate future.
Disclaimer: THIS IS NOT FINANCIAL OR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make, and only you are accountable for the results.
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