Terra Launches Phoenix-1 Replacement Chain After UST Collapse

Terra’s replacement proof-of-stake network began producing blocks at 06:00 UTC on May 28, 2022, creating a new mainnet identified as `phoenix-1`. Terra’s official account recorded the production of block 1, while the project’s mainnet repository identified Phoenix as the network for what it called Terra 2.0.

The launch was the clearest operational result of the emergency governance process that followed the failure of TerraUSD, or UST, to hold its intended one-dollar value and the accompanying collapse of the original LUNA token. It put a new ledger and new LUNA asset into service. It did not restore UST’s peg, reverse transactions on the original chain or make holders whole.

A new genesis, not a repaired stablecoin

Terra Classic users had approved governance proposal 1623 on May 25, 2022. The plan preserved the original network under the Terra Classic name, with its assets renamed LUNA Classic, or LUNC, and UST Classic, or USTC. The new Phoenix chain started from a separate genesis and did not include the algorithmic stablecoin design that had defined the former ecosystem.

That distinction mattered institutionally. Terra’s response was not a technical patch to the failed peg mechanism. It was a governance-led attempt to move developers, validators and users onto a replacement network while leaving the historical chain in existence. A running mainnet proved that validators could coordinate a launch; it did not prove that applications, liquidity or confidence would migrate with them.

The airdrop defined the reset

The genesis plan set an initial supply of 1 billion new LUNA. Official Terra materials allocated 30% to a community pool, 35% to pre-depeg LUNA holders, 10% to pre-depeg aUST holders, 10% to post-depeg LUNA holders and 15% to post-depeg UST holders. In total, 70% was assigned across those four holder groups and 30% to the community pool.

Eligibility depended on two recorded snapshots. Terra’s May 28 calculation notice placed the first at Terra Classic block 7,544,910 on May 7, 2022 at 14:59:37 UTC and the second at block 7,790,000 on May 26, 2022 at 16:38:08 UTC. The project called these the “pre-attack” and “post-attack” snapshots; that was Terra’s contemporaneous label, not a verified attribution of who or what caused the collapse.

Distribution was not equivalent to immediate liquidity. Allocation rules varied by asset, snapshot and wallet size, and substantial portions were subject to cliffs, vesting or staking at genesis. Participating exchanges also controlled their own crediting and trading schedules. An eligible balance therefore did not establish that a holder could sell the full allocation on May 28.

What the launch established

Contemporaneous coverage from The Block and Crypto Briefing independently reported that Phoenix was producing blocks and that the airdrop accompanied the launch. Terra’s repository supplied network configuration and the official genesis artifact, while the project’s dated calculation notice documented supply, snapshot heights and eligibility logic.

The defensible May 28 conclusion is narrow but consequential: Terra created a functioning replacement chain after its May 2022 ecosystem crisis and used a retrospective token distribution to seed ownership. The launch did not quantify recovered losses, settle disputes over fairness or demonstrate durable economic demand.

No price or percentage move is asserted here. Early LUNA trading was fragmented across venues with different listing times, thin opening liquidity and no consolidated cryptocurrency close. Treating a venue’s first trade or intraday extreme as a universal market price would create precision the surviving record does not support.