New Proposal: Terra To Distribute 0.5% LUNA Emergency Allocation To Projects.
The Terra community is yet again moving another proposal, and this time, things seem to be going the emergency way.
According to a recent proposal, an emergency distribution of 0.5% of LUNA is needed to save the ecosystem from losing steam just days after the launch of Terra 2.0.
When Terra Revival Plan 2 was drafted, 10% of LUNA was allocated for incentives to projects on the platform. Of these, 0.5% was earmarked as emergency allocation to support projects building products on Terra 2.0 right after its launch.
Also, 1.5% was allocated to projects already building on Terra Classic. The other 8% was assigned to the “Developer Mining Program,” where developers get a share according to their TVL (Total Volume Locked) in their projects.
However, for the said emergency fund, guidance is needed to establish the distribution criteria and identify qualifying projects that should benefit.
Proposed Distribution Formula
The proposal identified three categories of projects that may need the support:
- Those hosted on Terra Classic and have reached a product-market fit (PMF) stage and measurable TVL
- Those on Terra Classic and have reached PMF but with no relatable TVL
- Those launched, or not yet launched, but haven’t achieved PMF or TVL
Apparently, there are around 50 projects that need funding. There is 1 billion LUNA minted on Terra 2.0, meaning that 0.5% of these would be 5 million LUNA.
The proposal put forward a distribution formula of the 5 million LUNA for the three categories:
- 5 million LUNA to be distributed among projects with both PMF and TVL
- 1 million LUNA to be distributed among projects with PMF but no measurable TVL
- 5 million LUNA to be distributed among projects that have launched or are not yet launched and have achieved neither PMF nor TVL.
While the proposal is excellent and geared towards growing the Terra ecosystem, there’s a catch. Projects that benefit from the funds must use them to support Terra 2.0 and develop a product on the platform within three months.
They’ll also be required to post quarterly reports to tell the community how they used the funds. If they fail to adhere to any of these requirements, they’ll be required to refund the funds.
The Terra ecosystem has been struggling to stay afloat for a while, especially after the launch of Terra 2.0, which didn’t go very well. It’s yet to be seen whether this new proposal will positively impact.
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