Terra is a decentralized, open-source, and public blockchain protocol that harnesses a Proof-of-Stake consensus mechanism to empower decentralized applications (dApps), particularly within the realm of decentralized finance (DeFi). LUNA stands as the native digital asset of the Terra blockchain, functioning as both the governance token and utility token within the ecosystem.
The original Terra 1.0 ecosystem experienced a tumultuous event when it was subjected to an attack that resulted in the de-pegging of the TerraUSD (UST) stablecoin, leading to a severe crash in the price of the original Terra (LUNA) token. This unfortunate development caused losses exceeding $40 billion in the cryptocurrency market, prompting co-founder Do Kwon to formulate a revival plan.
LUNA 2.0 was introduced following the approval of governance proposal 1623 by the Terra community. This marked the genesis of a brand-new blockchain, distinct from Terra 1.0, now called Terra Classic (LUNC).
Terra 2.0, with LUNA (or LUNA 2.0) as its native token, officially commenced its operations on May 27, 2022. The mainnet launch took place on May 28, 2022, with the creation of the first block, Phoenix-1, occurring at approximately 06:00 UTC.
Terra 2.0 is not a hard fork of the original Terra blockchain but rather a novel blockchain protocol. It deviates from Terra 1.0 by discontinuing support for stablecoins, a feature prominent in its predecessor. The Terra Ecosystem Revival Plan, spearheaded by Do Kwon, outlines Terra's future role in supporting leading dApp projects from the original blockchain while eventually replacing the Terra 1.0 network.
Projects and assets operating on the original Terra blockchain will not transition automatically to the new blockchain. Instead, they are required to initiate their migration. Several leading dApps, such as Astroport, Prism, RandomEarth, OnePlanet, and Stader, have expressed their commitment to migrating to Terra 2.0.