TerraCVita Opposes LUNC Proposal 11468 to Protect Investors Funds

The proposal seeks to re-enable IBC to the Injective blockchain – a move that would allow the Terraport exploiter to take Terra Classic’s funds.

TerraCVita, the development group behind Terraport, has urged the community to vote against Terra Classic (LUNC) Proposal 11468 to safeguard the funds lost in the Terraport hack. The proposal seeks to enable IBC to Injective, which would allow the exploiter to move the stolen funds off Terra Classic.

In a tweet today, TerraCVita confirmed that they had identified all the wallets containing the funds siphoned from the Terraport liquidity pool on April 10. They assured that centralized exchanges are working to block the stolen assets. 

?Update?
We've identified all wallets with funds stolen from @_Terraport_
CEX's are blocking stolen funds and attackers are using all methods to get funds off LUNC.
We think IBC opening will increase the chance of investor funds being lost for good.
"Vote No" to protect… pic.twitter.com/wzjnGpkysA

— TerraCVita (@TerracVita) April 14, 2023

However, it was disclosed that the exploiters are attempting to move the assets off Terra Classic. Re-enabling the Inter-Blockchain Community (IBC) channel to Injective will allow them to take the assets off Terra Classic. ‘We think IBC opening will increase the chance of investor funds being lost for good.  “Vote No” to protect investors,’ TerraCVita remarked.

Currently, the Terra Classic IBC client to Injective is expired. The proposal seeks to replace the expired IBC client with the active client. This will re-enable the IBC channel to Injective, allowing inter-blockchain transactions to and from Terra Classic and Injective.

The TerraCVita (TCV) validator operator funded the proposal on April 12, two days after the exploit on Terraport occurred. Notably, a similar proposal was made in the Injective ecosystem on the day of the exploit, which has already passed. 

On the day of $TERRA hack, a prop was raised on the @Injective_ blockchain to re-open IBC to $LUNC

TCV then funded a prop to do the same on $LUNC on the 12th.

This is the $TERRA exploiters plan to drain the remaining funds. These will NOT be recoverable.

— 0xEars (@0x_Ears) April 14, 2023

High Stakes Clears the Air

The proposal’s funding just two days after the Terraport exploit raised conjectures that the TerraCVita validator could be complicit in the hack. High Stakes, a Swiss-based team behind the TerraCVita validator, recently cleared the air to address these concerns.

1) #LUNCCommunity IMPORTANT MESSAGE: @HighStakes_CH (who is running the @TerracVita validator) has clarified that the current $lunc IBC reopening proposal 11468 was submitted by them on request of the @Injective_ team. There was no malicious intent by TCV, in fact they acted pic.twitter.com/MZeh1sjGsl

— ? LunaticLuncLover69 ? ? ? (@luna_lover69) April 14, 2023

The High Stakes team noted that Achilleas, a member of the Injective team, submitted the proposal, and the funding was done at his request. The team noted that pending rewards from the TCV validator were used to fund the proposal, as no LUNC tokens were readily available. 

Note that High Stakes surrendered ownership of the TCV validator by the end of the summer but continued to handle the technical aspects of maintaining it. The High Stakes team emphasized that the funding was not connected to the Terraport hack, and TerraCVita was not in any way involved.

So far, the proposal is not passing, as several validators that voted Yes have reviewed their votes. 62.5% of votes are now opposing the proposal. Validators Allnodes, TerraCVita, and Luna Station 88 are among those that voted No.