Authors: fragwuerdig / Rex Harrison (Rexyz)
fragwuerdig: owns LUNC and staked LUNC. Owns ATOM and staked ATOM
Rexyz: owns LUNC and staked LUNC. Is a senior partner of TerraCVita, operates a
validator (TerraCVita) on the Terra Classic chain and is a trustee of the Terra Classic
Through accepting this proposal it is proposed to unfreeze the expired IBC Tendermint client
07-tendermint-641 which interconnects the Cosmos SDK blockchains cosmoshub-4 and columbus-5 (TerraClassic)
IBC is a three-layered network protocol which interconnects blockchains. Applications on the
chain use the high-level IBC channels to interchange information (e.g. transferring funds).
Channels are the blockchain application-end interface to enable access to IBC as a whole.
Channels are built upon IBC connections which control and secure data flow between
chains. Connections in turn are built upon the so-called Tendermint clients, which handle the
consensus states on the both interconnected chains. On each of the both interconnected
chains one client that references the other chain is necessary to make the protocol work.
In order to be trustworthy, the state of these clients needs to be periodically updated by IBC
relay operators. In case the relay operators seize their work, the clients can become expired
and will be frozen. After having been frozen a state update of the client is not possible
anymore. This is exactly what happened, when the Terra Luna price crashed back in May
'22. As a result the communication between both chains was not possible anymore.
The ibc-go implementation of the IBC protocol in the Cosmoshub blockchain exposes a
type of governance proposal, which enables a community to reactivate an expired/frozen
Tendermint client. When such a proposal passes, then the state of another (but active and
updateable) Tendermint client which is available on both chains gets copied into the expired
client, thus reactivating the expired one. It is to establish this reactivation function that this
governance proposal is about.
Results of Voting
Yes = The canonical Tendermint client 07-tendermint-641, which interconnects columbus-5
(Terra Classic blockchain) and cosmoshub-4 will get updated with the state of another active Tendermint client.
Unfreezing an expired client does not necessarily mean that you can transfer funds or exchange IBC packets between both chains again. The Tendermint client on the columbus-5 chain that references cosmoshub-4 might be frozen as well. However, voting “yes” represents the intend of the community to reactivate the IBC connection.
No = The Tendermint client 07-tendermint-641 remains expired/frozen. This shows the intent
of the community, that it does not want a functioning IBC connection between Terra Classic and Cosmoshub anymore.
Risk and Opportunities
There are no significant risks to this proposal being accepted.
In the case that this proposal passes and the connection between Terra Classic and
Cosmoshub gets reactivated, there is also no significant risk of diluting the Terra Classic on-
chain overall-supply. The amount of LUNC trapped on Cosmoshub is ~36,100 (as queried
on 23rd October ‘22).
Reactivating the IBC’s across connected chains might have a great marketing effect through
signalling that it shows that the community makes sensible decisions and takes action.
Reactivating IBC’s could release ’trapped’ Atom on TerraClassic, making affected Atom holders whole again.
Reactivating IBC’s brings interoperability meaning that Atom holders are able to generate yield from liquidity pools on TerraClassic.
The proposal is open for discussion.