- Terra community has proposed distribution method for 0.5% emergency LUNA allocation.
- Terra ecosystem revival plan earlier designated 10% of LUNA supply to be dedicated to incentivizing developers on Terra 2.0.
- The proposed framework aims to retain builders on Terra.
Terra community has proposed distribution method for 0.5% emergency LUNA allocation. The Terra Ecosystem Revival Plan 2 specified allocation of 10% LUNA supply to incentivize developers on Terra 2.0 as:
- Emergency allocation: 0.5% of total supply (the “Emergency Fund”)
- Developer Alignment Program: (1.5% of total supply)
- Developer Mining Program: (8% of total supply)
The Plan did not mention how to allocate the Emergency Fund. Hence, guidance is needed from LUNA governance for a suitable determination of this aspect of the Plan.
3 groups of people who qualify for receiving the Emergency Fund are:
- Projects launched on Terra Classic and achieved product-market fit and TVL
- Projects launched on Terra Classic and achieved product-market fit but have no measurable TVL
- Projects not yet achieved product-market fit
Projects who achieved product-market fit have both the support and incentives to continue building on Terra 2.0. Whereas, projects who have not yet achieved product-market fit have support to continue building until an opportunity to secure funding from traditional means arises.
5M of Luna would be distributed as:
- 2.5M of Luna across projects who launched on Terra Classic and achieved product-market fit and TVL (PMF and TVL)
- 1M of Luna across projects who launched on Terra Classic and achieved product-market fit but have no measurable TVL (PMF but no TVL)
- 1.5M of Luna across projects (pre- and post-launch) who have not yet achieved product-market fit (pre-PMF)
TVL-based allocation of the Emergency Fund would look like this:
As mentioned in Terra Ecosystem Revival Plan 2, each team will commit:
- Using its portion of the emergency fund to fund development on Terra 2.0 for at least one year
- Launching some product on Terra 2.0 within 3 months of receiving the allocation
- Providing transparency to the community in the form of quarterly public reporting on Agora on its progress and use of funds
If a team fails to fulfil these requirements, it will return the LUNA received such that it can be allocated to other builders.
The proposed framework has a goal of retaining builders on Terra via monetary incentives to high TVL projects and capital for mid- to smaller size teams.
While Terra hopes that this grants & evaluation framework will materialize, it will take time to establish; many smaller teams are in danger of crash or departure. Therefore, it has been suggested to distribute 50% of the funds now, optimizing for speed of execution and getting a baseline distribution and remaining 50% after 2-3 months to ensure that teams receiving the funds have made meaningful progress on product development.
Few days back, Today NFT News covered, Terra Launches “Terra Bridge V2” a New System on Terra Mainnet.