The Terra blockchain is about to get its biggest upgrade today, moving from Columbus 4 to Columbus 5.
With the Columbus 5 mainnet set to roll out on September 29, we’re taking a look at some of the biggest differences the upgrade will bring to the protocol.
Columbus 5 marks the beginning of a new era for the Terra ecosystem
Terra’s biggest upgrade to date – Columbus 5 – was initially planned at the beginning of September, but has been moved by the development team to ensure that the upgrade is compatible with the current Columbus 4 release. The Columbus 5 mainnet is finally set to go live later today and usher in a new era for this ambitious blockchain project.
Columbus 5 promotion for Luna dollar Coming this week!
– Fomocraft (FOMOcraft) September 27, 2021
One of the biggest changes Columbus 5 will bring to Luna is the integration with the Inter Blockchain Communication (IBC) protocol. The blockchain communication protocol will create a bridge between the Cosmos ecosystem, Solana and Polkadot, and connect Terra with more than 250 different decentralized applications.
The merger will also increase Terra’s throughput – the development team believes that the IBC will increase the capacity of blockchain transactions per second (TPS) by up to 100x.
Today’s upgrade will also introduce the Solana wormhole to the Terra, creating a seamless bridge of ground reservoirs for the thriving Solana ecosystem.
And while the two cross-chaining-focused upgrades are set to encourage mass adoption of the Terra, it’s the changes in seignorage that will benefit the Terra community the most.
The Terra blockchain is backed by two pillars – LUNA, its management and benefit token, and the original stablecoin led by UST. The stablecoins are linked through a seignorage mechanism that requires burning LUNA tokens. So far, a portion of the storage required for a stablecoin mint has been allocated to reward pools and distributed back to the community.
This Columbus 5 will remove and burn all LUNA tokens used to denote the Earth’s tanks. The change is designed to add downward pressure on the supply of LUNA and increase its price while supporting a strong and stable currency ecosystem.
However, this does not mean that the Terra community will lose a valuable source of income. The most recent upgrade will instead allocate all swap fees to community groups that will be distributed to LUNA Agents. With the increasing adoption of terrestrial treasuries and the burning of more LUNA tokens, the rewards for staking will increase, making LUNA staking more attractive to users.
The upgrade will also introduce ozone insurance, which protects the blockchain from any potential vulnerabilities. The insurance protocol will make it possible to cover the risks of technical failures with leverage, making the entire ecosystem more secure.
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