Rarely do we see a DAO vote on a multi-year, $40 million protocol expenditure on a sports sponsorship. Terra holders, though, have been voting on just that this week, in what seems to be a first-of-its-kind event.
Do Kwon, creator of Terraform Labs, made a fresh proposal to the Terra community this week, inviting LUNA holders to vote on a new five-year, $38.5 million partnership with an unknown club in one of the United States’ ‘big four’ sports leagues (MLB, NBA, NFL, NHL). This seems to be the first occasion in the history of sports sponsorship that a DAO (or similarly formed entity) has voted collectively to participate in sponsoring.
The proposal is the second of three big announcements made as part of Terra’s most recent campaign, dubbed “[REDACTED].”
Terra and Its Three Sequential Announcements
The first instalment of the three-part announcement occurred only a few weeks ago, with Terra’s unveiling of the ‘Luna Foundation Guard,’ or LFG.
The cash is intended to come from the community pool, and the proposal itself is built around a few key components: the first is the narrative, the concept that the foremost decentralised stablecoin machine gaining sponsorship of this calibre is indicative of a larger “DeFi to the people” campaign. The second is the notion that being courageous is necessary for progress. And the third rationale is perhaps best articulated in the proposal itself: “stimulating the DAO governing community’s inventiveness to reach its full potential.”
The NBA is the most likely destination, with the MLB and NHL both being viable options, and the NFL a non-zero, but low, possibility of including the team with whom this transaction is made.
Discussion on Decentralization
The plan has sparked a renewed controversy regarding the degree to which the Terra network and the Terraform Labs team are centralised. Although the Terraform Labs wallet has a sizable quantity of LUNA, Do Kwon and the TFL team have been doxxed, the community has cause to think that Kwon’s ideal of complete decentralisation is well on its way.
Kwon has discussed a ‘killswitch,’ sometimes referred to as ‘Armageddon,’ that may completely decentralise the Terra ecosystem without the involvement of Terraform Labs. Once that mode is activated, it is widely assumed that any leftover cash in the aforementioned TFL wallet will be burnt. While Terra’s current status is not “as decentralised” as other participants in the sector, decentralisation is obviously on the way — and it will be fascinating to observe how movements like this one affect this decentralisation in the long term.
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