Terra Classic

Protocol time

	Protocol time	Human readable time
Protocol time	Block	5 seconds
First reward delay	1 block	5 seconds
Reward frequency	Every 5 blocks	25 seconds
Unbonding period	21 days	21 days

• The protocol has an implicit block time target of 5 seconds. However, this is not an enforced parameter and block times can fluctuate depending on network conditions. Block times have been clocking closer to 6 seconds.

Lifecycle

Must know before staking

Minimum stake amount	❌
Partial stake changes	✅
Partial reward withdrawal	❌
Compounding	❌
Penalty	✅	Offline - 0.1%
Slashing	✅	Equivocation - 5%

• Terra Classic is the original protocol from which Terra has forked from. Terra Classic’s token is denominated as LUNC.

• Redelegation without unstaking. The protocol allows stakers to switch their validators without having to unstake and then stake again. The redelegation function can be used only once every 21 days.

Advanced topics

General

• Staking rewards comes from the Oracle pool. In May 2022, Terra Classic experienced drastic de-pegging of its stable coin, which led to unprecedented inflation of its native token. This extreme situation caused many of its protocol economic levers to also inflate to unprecedented levels, including the Oracle pool which rewarded validators for making accurate reports of token prices. The protocol’s community has been focused on decreasing total supply of tokens and as such decided to use the Oracle pool as the main source of rewards for stakers.

• Governance power delegation. By staking with a validator, stakers are delegating governance power to that validator as well. Stakers have the option to overwrite their validator’s governance vote.

Rewards

• Rewards come from newly issued tokens and transaction fees.

  • Oracle pool. During the crash of May 2022, the protocol incurred unprecedented inflation across many of its economic levers, including the Oracle pool which rewarded validators for making accurate reports of token prices. The community has decided to rely on the Oracle pool for the foreseeable future to reward stakers.

  • Transaction fees.

• Factors that impact realized rewards.

  • Commissions.

Risk

• Penalty. A validator that fails to be online for 500 blocks out of the most recent 10,000 blocks will be considered offline. Stakers of an offline validator will be penalized and lose 0.1% of their stake. The offline validator will kicked off the active validator set and will be able to join only after 10 minutes has passed.

• Slashing. A validator that attests to two different blocks will be slashed. Stakers of a slashed validator will lose 5% of their stake. The slashed validator will be indefinitely kicked off the active validator set and will need to create a new validator.

Validators

Total validator cap	✅	130
Validator requirements	❌

Resources

• Terra Classic documentation: https://classic-docs.terra.money/

• Terra Classic explorer: https://terraclassic.stakebin.io/terra/