Flipside Crypto is taking a look at the coming Columbus-5 mainnet upgrade and how it could affect activity on the blockchain.
Changes are coming to the Terra blockchain — BIG changes. In fact, according to the Terra Twitter account itself, it’s going to be “Terra’s most significant mainnet upgrade yet.”
So, before it arrives later this week, let’s take a closer look at what the upgrade will mean for Terra, the #LUNAtics and other Terra users, and the protocols that call it home.
Columbus-5 — What Is It and What Will It Bring?
There are three main changes that Columbus-5 brings: an upgrade to Stargate and the integration of IBC protocol, the integration of Ozone and Wormhole, and a new burn policy.
Each one will carry major implications for the Terra ecosystem.
Burn, Baby, Burn
Perhaps the most notable part of the upgrade for many retail investors and speculators is the decision to burn all seigniorage. Previously, seigniorage, or LUNA burned to mint UST, was diverted to a community pool that was used for oracle rewards and eventually became overfunded. After the deployment, this LUNA will instead be burned, which is designed to increase the value of the currency and give more rewards to LUNA stakers.
Upgrading to Stargate
This is one of the biggest changes brought on by Columbus-5. Upgrading to Stargate will enable integration of the Inter Blockchain Communication protocol, or IBC, which provides support for a large collection of interchain use cases. This will make UST the go-to stablecoin for networks like Cosmos, expanding the use case of Terra to more than 250 unique dapps.
Welcome, Ozone + Wormhole
Columbus-5 will also see the introduction of Ozone and Wormhole. Ozone, a coverage protocol designed by Terraform Labs, is designed to lock up and secure a significant share of UST, providing insurance for projects built by TFL. Wormhole, meanwhile, is a bridge between Terra and Solana that will enable the movement of UST between the two networks. This should allow further integration and collaboration between Terra and Solana projects.
How Will Columbus-5 Affect Users?
First, and foremost, users should know to stay away from Terra and its associated protocols and projects during the upgrade later this week. Attempting to complete any transactions could result in funds being lost for good.
But what about after the upgrade has been deployed?
The arrival of Columbus-5 also means that a horde of new protocols and going projects will be going live this week. Once the upgrade is officially deployed, more than 50 protocols will soon be live and accessible to users. These protocols will cover everything from existing applications like savings accounts and mirrored assets to new use cases like investment dashboards, NFT creation and sales, derivatives, and more.