- Terra aims to incentivize Alliance adoption and create mutually beneficial economic alliances between LUNA and other Cosmos ecosystems.
- Terra has proposed a unique method of distributing LUNA staking rewards to facilitate the process and incentivize cooperation.
A new proposal from the Terra ecosystem is looking to create a wave of economic alliances between its native token LUNA and other Cosmos ecosystems. The plan, termed the ‘Alliance Signaling Proposal’, has been designed with two major objectives: to incentivize Alliance adoption and to foster the cross-pollination of users and liquidity between Terra and allied chains.
1/ 🌟 We're excited to announce that the Alliance signaling proposal, which passed on June 8th, will incentivize the adoption of the Alliance module and the formation of economic alliances between Terra and other Cosmos ecosystems 🤝https://t.co/TTQ5RUSRe0
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) June 16, 2023
To achieve these ambitious goals, Terra is proposing to allocate a combined 3% of LUNA staking rewards to at least one Liquidity Swap Derivative (LSD) from the first ten Cosmos chains that integrate Alliance and add a LUNA LSD as an Alliance asset with a positive yield. This method is aimed at promoting a cooperative ecosystem among the different chains.
A ‘Yes’ vote in this proposal signals support for Terraform Labs (TFL) to develop a protocol that recalculates and distributes these LUNA staking rewards automatically to each foreign LSD Alliance asset. This will be based on the yield the allied chain offers to LUNA LSD Alliance stakers. Consequently, the higher the Annual Percentage Rate (APR), the larger the RewardWeight the allied chain’s LSDs will be allocated on Terra.
The proposal has been put to a vote, and as of now, a majority of 91.10% has voted in favor, with only 1.81% voting against, and 7.09% abstaining. A total of 51.95% of the community has participated in the voting process. Interestingly, 64 validators voted in favor of the proposal, one voted against, five abstained, while 61 did not vote. Some of the major validators include Terrascope, KuCoin LUNA Node, and Terran One, among others.
Terra’s proposal is a step towards a more interconnected Cosmos ecosystem, allowing for increased cross-pollination of users and liquidity. It is an encouraging sign that the blockchain industry is not just about competition, but cooperation and symbiosis among different ecosystems. By sharing the rewards of staking, Terra aims to foster economic alliances that are mutually beneficial and contribute to the overall growth of the crypto universe.
The full proposal can be read on Terra’s agora discussion platform.
