September 26, 2022

Terra’s revival plan was approved by network validators earlier Wednesday.

Source: coindesk.com
Source: coindesk.com

Decentralized finance (DeFi) project Lido Finance voted overwhelmingly against supporting the new Terra blockchain, with less than 5.5% voting in favor. The revival plan was approved by Terra’s network validators today.

Lido, a liquid staking protocol, is the fourth-largest DeFi platform, with $8.43 billion in total valued locked according to DeFi Llama.

Kwon’s proposal is to carry out a hard fork of the blockchain, with the original chain continuing as Terra Classic. The new one will focus on attracting DeFi applications.

A hard fork involves splitting the chain on which a protocol runs into two, with the new branch using a different set of rules. It represents an opportunity for Terra to perform a reset on its failed project, which saw native stablecoin UST and sister token LUNA collapse to near zero earlier this month.

However, initial reaction to Kwon’s plans was largely negative with some 92% of 6,220 Terra community members voting against the change.

Goldman Sachs flagged Lido as illustrative of how decentralized finance can amplify systemic risk in a note released Friday, citing the protocol’s links to Terra’s Anchor protocol.