Terraform Labs to open a shuttle bridge, to destroy LUNA tokens
Terra has announced significant developments following a bankruptcy court order in Terraform Labs' ( TFL ) Chapter 11 case. The court also authorized TFL to take critical steps, including reopening the shuttle bridge and destroying large amounts of LUNA tokens, marking a critical juncture in the company's restructuring efforts.
In a post on X, the blockchain platform noted that as part of the court's order, TFL will reopen the Shuttle Bridge, which allows users to return locked assets on Terra Classic.
Reopening the shuttle bridge
The shuttle bridge, the necessary infrastructure for transferring assets between Terra and other blockchains, was shut down earlier. TFL plans to introduce a simpler interface to transfer all assets in the Shuttle Bridge Wallet to a new wallet and facilitate the redemption process.
According to Terra, users will have a 30-day window to retrieve their packaged items from Bridge Wallet. After this time, TFL intends to permanently close the shuttle bridge, and any remaining assets in the wallet will be destroyed.
Loss of LUNA Tokens
In a move to reduce the distribution of LUNA, a court order authorized TFL to cancel the distribution and destroy the 150 million LUNA tokens received from the Terra community funding. This divestment is part of a broader strategy to stabilize LUNA's value and restore confidence among the community and investors.
Related: Terraform Labs to End Operations, Terra Community to Take Over
Additionally, TFL will begin the process of liquidating the 125 million LUNA currently held by the 49 validators recommended by Terra. Once deactivated, these 125 million LUNA tokens and 2.5 million LUNA used for liquidity will be destroyed.
Future plans
TFL's proposed Chapter 11 plan, which includes these steps, has not yet received full approval from the bankruptcy court and is not expected to take effect until late September 2024 at the earliest. This plan is part of TFL's overall strategy to emerge from bankruptcy and position Terra as a stable and reliable player in the cryptocurrency space.
The actions taken by TFL follow an agreement between TFL and the US Securities and Exchange Commission (SEC). This settlement aims to address regulatory concerns and ensure compliance with federal securities laws, further contributing to restructuring and stabilization efforts.
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