Why Does The Luna Classic Story Remind Me of the Hive/Steem Story?

in LeoFinance5 months ago

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The other day I wrote about what is going on with the Terra Luna Classic (LUNC) chain. I made the observation at the end that their situation has reminded me of how the Hive chain came into being.

@forexbrokr asked me a couple of questions in the comments:

  1. How would you compare what's going on here, with what's happened between Steemit Inc and our community?
  2. Are they focusing on decentralisation or just creating the same problems as before?

When I checked on some details about #2 I discovered some information about measuring decentralization of a chain I never knew before. So, @forexbrokr I decided to answer you in this post while sharing what I’ve learned.

1. The Steem / Hive Situation vs Terra

Even before Justin Sun reared his head on Steem the community had a bit of a shaky give and take relationship with Steemit Inc the primary code development entity. The huge stake known as the premine they held was capable of exerting control over the rest of the chain.

That was a concern from the beginning. Ned Scott didn’t use it to do so but he was not adverse to letting the community know he could if he wanted to through some rather large, seemingly random delegations at times

Terra’s main developer group was TerraForm Labs (TFL) owned and controlled by Do Kwon the creator of UST and LUNA (now USTC and LUNC). About 15% of their token was through private sale giving an unknown level of control to the private investors. Many believe that control was mostly Do Kwon

When Justin Sun showed up, the premine became a problem when he would not commit to not using it to control the chain. His failure to do so is what moved the community to speak up and become more active. When Sun installed the sock puppets to gain control over the governance the intensity of the community backlash grew.

Meanwhile a group of developers and others were working behind the scenes preparing for what became inevitable. The hardfork option was ready to go. Some of the Steem community choose to stay, some were angry over some accounts not getting the initial airdrop.

—-

On Terra it appears from what I’ve been able to learn most investors didn’t seem to fussed about the private sale block until the collapse happened. Then, as I explored around on Reddit the tone was very much a belief Do Kwon held control of the chain. Some believed he had profited even as the collapse took place. There is no proof of that at this point.

When Do Kwon pushed the proposal to splt into two chains many believed the proposal only passed because he exerted pressure on the validators to approve the proposal. It soon became apparent that even though Do Kwon claimed development would continue on both chains, there were only plans to develop the new LUNA chain.

Many in the community were angry and wanted nothing to do with either chain. Others wanted the classic chain developed. The call to burn off the excess supply was almost steady. At that point it appeared many were just grasping at any idea if it might restore the classic chain.

TFL was stonewalling any communication about the classic chain. Meanwhile word started to circulate about a group called Terra Rebels. I found their discord and started exploring. The group at that point was mostly developers led by a guy named Zaradar.

I sat in on some impromptu AMAs led by him. The first one saw over 200 people pile into a voice channel. Anyone who was around during the Steem / Hive situation will immediately get the parrallel. Daily townhalls saw 200 or more during that time.

What I heard was a clearly articulated goal that was being worked on. The dev group had hardforked the code from TFL and was ‘working on this interesting problem’, namely what caused the collapse. They then planned to fix the code into a better working chain run by the community.

Further conversation revealed that should TFL and Do Kwon completely refused to either develop their own code to fix the classic chain or accept what the Terra Rebel group was doing, another hardfork was not out of the question as a final solution.

Once again, I saw and heard the same determination from the community and the devs that led to the formation of Hive. To their credit, once the community passed proposals to take the first steps to re-establish governance on the classic chain TFL did communicate with Terra Rebels before the 10 business day deadline to do so ran out.

2. Will the Terra Classic Chain Be Decentralized or Not?

The short answer is they are going to be a community run decentralized chain. TFL and Do Kwon don’t have the say over it that they did. Currently Terra Rebels is the main code developers.

Zaradar has been forcefully direct that under his watch, Terra Rebels will be one group that does code and there is no reason for other groups to not do community proposals and code.

If you go into their discord you’ll see there are channels setup for their operations and they are active. They hold AMAs where people can ask what they want and get direct answers.

If you check out the second video I shared in my last post you’ll hear an interview done with Zaradar talking about what has happened and what they plan going forward to improve governance, secure the chain from another collapse and bring utility to the system.

Nakamoto Coefficient

When I was checking around this morning I noticed a Tweet from TerraRebel's official account that is currently showing in the header of this post.

LUNC had staking re-enabled on Friday evening. Holders of LUNC can move it into the Terra Station wallet and delegate to one or more validators. The tweet is encouraging people to share their delegation across multiple validators with the goal of reaching a Nakamoto Coefficient of 20.

I’d never heard of the Nakamoto Coefficient. Checking around I learned it was created in 2017 by the former Coinbase CTO Balaji Srinivasan. Its purpose is to measure the level of decentralization on a blockchain. The higher the coefficient the more decentralized the chain is.

That’s a bit of a simplistic explanation as there are several factors which goes into determining the Coefficient. It is an expression of how difficult it would be to take control and disrupt the chain.

Some of the factors taken into account on a POS system include:

  • percentage of circulating supply staked to a network
  • how many entities the staking is divided among
  • governance
  • chain development control
  • network accessibility
  • figurehead influence

Reaching 20 would increase the number of nodes a bad actor would have to gain a majority on to tamper with the operations.

The Coefficient can be used to help determine strengths and weaknesses on the chain by studying areas like:

  • nodes
  • clients
  • exchanges
  • developers
  • owners

So to answer your second question @forexbrokr,

Every indication I’ve seen is this is going to be very much a community owned and run chain that is working to be more secure and stable than it’s original versions.

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Shadowspub is a writer from Ontario, Canada. She writes on a variety of subjects as she pursues her passion for learning. She also writes on other platforms and enjoys creating books you use like journals, notebooks, coloring books etc.

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I still only understand like 1/1000 of this but I am so grateful you keep writing about it. I'll keep doing my best to figure out how it all translates into my life.

It is really confusing at the beginning.. well maybe even at most stages. A lot to take in.

is an excellent parallel between the networks.
Thanks for sharing.

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