The Terra blockchain is secured using a [proof-of-stake](https://coinmarketcap.com/alexandria/article/proof-of-work-vs-proof-of-stake) [consensus](https://coinmarketcap.com/alexandria/glossary/consensus) algorithm based on Tendermint, in which LUNA token holders [stake](https://coinmarketcap.com/alexandria/glossary/staking) their tokens as collateral to validate transactions, receiving rewards in proportion to the amount of LUNA staked. Terra will incentivize network security by providing staking rewards of 7% annual inflation. This is to align the interest of validators with the long-term success of the Terra ecosystem.

Terra (LUNA) has a supply of 1 billion tokens. It will be distributed as follows: * Developer mining program: 8% * Essential app developers earn a share of the mining program proceeds pro-rata to the amount of TVL every quarter for 4 years. * Developer alignment program: 1.5% * Protocol teams that were live in Terra Classic divide this allocation weighted by the last 30 day TVL from Pre-attack snapshot - 1 year cliff, 3 year vesting thereafter. Accommodations will be made for apps where TVL is not applicable. * Emergency allocation to app developers: 0.5% * Immediately after network launch to provide for runway while they build out product. Commit to returning funds if product has not been launched in 1 year. * Community pool: 20% * Controlled by staked governance * Pre-attack LUNA holders: 35% * All bonded / unbonding Luna, minus TFL at “Pre-attack” snapshot; staking derivatives included * For wallets with < 10k Luna: 30% unlocked at genesis; 70% vested over 2 years with 6mnth cliff * For wallets with < 1M Luna: 1 year cliff, 2 year vesting thereafter * For wallets with > 1M Luna: 1 year cliff, 4 year vesting thereafter * Pre-attack aUST holders: 10% * 500K whale cap - covers up to 99.7% of all holders but only 26.72% of aUST * 30% unlocked at genesis; 70% vested over 2 years thereafter with 6 month cliff * Post-attack LUNA holders: 10% * Staking derivatives included * 30% unlocked at genesis; 70% vested over 2 years thereafter with 6 month cliff * Post-attack UST holders: 15% * 30% unlocked at genesis; 70% vested over 2 years thereafter with 6 month cliff Definitions: * “Pre-attack” snapshot to be taken at at Terra Classic block 7544910 (2022.05.07 22:59:37+08:00) * “Post-attack” snapshot to be taken at Terra Classic block 7790000 (2022.05.27 00:38:08+08:00) All tokens locked or vesting are staked at genesis, and must be unbonded to become liquid. Furthermore, Terra[ committed to burning the remaining 1B UST](https://agora.terra.money/t/burn-the-remaining-ust-in-the-community-pool-cross-chain-liquidity-incentive-ust/6837) from the community pool to reduce the outstanding debt from the Terra ecosystem. The LUNA airdrop will happen on May 28, 2022, at 06:00 GMT.

Terra will continue without its algorithmic stablecoin UST and aims to preserve the Terra ecosystem with hundreds of developers working on different decentralized applications. The LUNA token will be airdropped across Luna Classic stakers, holders, residual UST holders and essential Terra Classic app developers. Terra removed the wallet of Terra Foundation Labs for the airdrop event, making Terra a fully community-owned chain. The airdrop will be carried out according to two snapshots taken, one before the Terra Classic crash (May 7) and one after it (May 27). The eligibility for the airdrop is as follows:

Terra was founded in January 2018 by Daniel Shin and Do Kwon. The two [conceived](https://medium.com/kucoinexchange/kucoin-ama-series-terra-luna-full-transcript-a3019e664195) of the project as a way to drive the rapid adoption of blockchain technology and [cryptocurrency](https://coinmarketcap.com/alexandria/article/what-are-cryptocurrencies) through a focus on price stability and usability. Kwon took on the position of CEO of Terraform Labs, the company behind Terra. Prior to developing Terra, Shin [co-founded](https://www.inc.com/magazine/201112/the-returnees.html) and headed Ticket Monster, otherwise known as TMON — a major South Korean e-commerce platform. He later [co-founded](https://www.koreatimes.co.kr/www/tech/2020/03/133_162546.html) Fast Track Asia, a startup incubator working with entrepreneurs to build fully functional companies. Kwon previously founded and served as CEO of Anyfi, a startup providing decentralized wireless mesh networking solutions. He has also worked as a software engineer for Microsoft and Apple. After the collapse of Terra Classic, Do Kwon issued a [revival plan](https://coinmarketcap.com/alexandria/article/crypto-news-may-16-do-kwon-s-revival-plan-doesn-t-impress-lfg-wallet-out-of-btc) that eventually led to the hard fork of Terra Classic and Terra. He [received criticism for his plans from Binance founder Changpeng Zhao and Vitalik Buterin](https://coinmarketcap.com/alexandria/article/do-kwon-publishes-revival-plan-for-luna-buterin-and-cz-skeptical), as well as from [disgruntled UST investors](https://coinmarketcap.com/alexandria/article/terra-s-blockchain-to-be-revived-but-some-investors-are-furious-with-do-kwon). His [proposal](https://agora.terra.money/t/terra-ecosystem-revival-plan-2-passed-gov/18498) was voted into effect by the community and Terra Classic hard forked into its new Terra blockchain on May 27, 2022.

[Terra (LUNA)](https://coinmarketcap.com/currencies/terra-luna-v2/) is a public [blockchain](https://coinmarketcap.com/alexandria/glossary/blockchain) protocol that emerged from [Terra Classic](https://coinmarketcap.com/currencies/terra-luna/). Terra Classic is home to the [algorithmic stablecoin](https://coinmarketcap.com/alexandria/glossary/algorithmic-stablecoin) [TerraClassicUSD (UST)](https://coinmarketcap.com/currencies/terrausd/). It's now-renamed LUNC token collateralized UST, which crashed in a bank run in May 2022. That devalued LUNA to virtually zero and caused a launch of a new chain — resulting in Terra Classic and Terra. [Read a full breakdown of the Terra crash here](https://coinmarketcap.com/alexandria/article/are-algorithmic-stablecoins-dead-already-a-full-breakdown-of-the-terra-crash). The development of Terra Classic launched in January 2018 and the blockchain launched in April 2019. It attempted to [combine](https://terra.money/Terra_White_paper.pdf) the price stability and wide adoption of fiat currencies with the censorship-resistance of [Bitcoin](https://coinmarketcap.com/currencies/bitcoin) (BTC) and offer fast and affordable settlements through its UST stablecoin. Terra Classic [offered](https://medium.com/terra-money/announcing-terrausd-ust-the-interchain-stablecoin-53eab0f8f0ac) stablecoins pegged to the U.S. dollar, South Korean won, Mongolian tugrik, and the International Monetary Fund's Special Drawing Rights basket of currencies. The new Terra blockchain continues the legacy of Terra Classic without the UST stablecoin. It will keep building with the help of the LUNA community dubbed “LUNAtics” and evolve the world-class UX and UI that brought Terra Classic up to second place in total value locked ([TVL](https://coinmarketcap.com/alexandria/glossary/total-value-locked-tvl)) at its peak. Many [DApps](https://coinmarketcap.com/alexandria/glossary/decentralized-applications-dapps) have agreed to migrate to Terra to continue their functionality.