Cody McGrath 
Terra has proposed to distribute 0.5% LUNA emergency allocation to support projects developing Terra 2.0 products after its debut
The Terra community is debating yet another plan, and this time, things appear to be heading in the wrong direction.
An emergency release of 0.5 percent of LUNA, according to a recent suggestion, is required to prevent the ecosystem from losing steam just days after the introduction of Terra 2.0.
Terra Allocated 0.5% LUNA For Projects
10% of LUNA was set aside for incentives for projects on the platform when Revival Plan 2 was drafted. A total of 0.5 percent was set aside as an emergency allocation to support projects developing Terra 2.0 products soon after its debut.
In addition, 1.5 percent was set aside for projects already underway on Terra Classic. The remaining 8% went to the “Developer Mining Program,” which gives developers a part of their projects based on their TVL (Total Volume Locked).
However, in order to set the distribution criteria and identify suitable projects that should benefit from the said emergency fund, guidance is required.
Formula For Distribution
The proposal listed three types of projects that could benefit from the funding:
- Those who are hosted on Terra Classic and have a demonstrable product-market fit (PMF) stage.
- Those that are on Terra Classic and have reached PMF but have no TVL in common
- Those that have been launched, or are about to be established but have not yet achieved PMF or TVL
Around 50 projects are reportedly in need of finance. On Terra 2.0, there are 1 billion LUNA minted, which means that 0.5 percent of these are 5 million LUNA.
The proposal proposed a formula for distributing the 5 million LUNA among the three categories:
- A total of 5 million LUNA will be allocated among projects that include both PMF and TVL.
- 1 million LUNA will be allocated to projects with PMF but no detectable TVL.
- 5 million LUNA will be awarded among projects that have launched or are in the process of launching but have not yet attained PMF or TVL.
A Big Catch
The concept is wonderful and oriented toward expanding the Terra ecology, but there is a catch. The funds must be used to support Terra 2.0 and produce a product on the platform within three months of receiving them.
They’ll also have to provide quarterly reports to the community detailing how they spent the money. They will be compelled to repay the funds if they fail to meet any of these standards.
For a long time, the ecosystem has been battling to stay afloat, especially following the disastrous introduction of the new token. It remains to be seen if this new suggestion will have a favorable impact.