Executive Summary

Following Proposal 12142 and feedback from the community and validators on the original v0.50 upgrade plan, OrbitLabs proposes upgrading Terra Classic directly to Cosmos SDK v0.53.x — skipping the intermediate v0.50 mainnet deployment.

This approach is more efficient because we skip the intermediate SDK v0.50.x upgrade entirely and move directly to SDK v0.53.x. 

By going straight to SDK v0.53.x, we consolidate the migration effort, avoid two separate mainnet upgrade events, and still deliver all the benefits originally planned – plus IBC v2 (Eureka) support.

Motivation

• Efficiency: Single mainnet upgrade event, reducing the collaboration/testing effort for mainnet upgrade
• Future-proofing: SDK v0.53.x is the latest stable long-term release.
• Interoperability: Enables IBC v2 (Eureka), unlocking hub-and-spoke routing through Cosmos Hub.

Scope of Work

1. SDK & Module Upgrade

• Migrate main modules to SDK 0.53.x compatible – Cosmos SDK v0.53.x – Wasmd v0.61.x

2. IBC-Go v2 (Eureka) Enablement

• Upgrade IBC-Go directly from v7.10.0 to v10.x.0 
• Enable IBC v2 routing logic in app wiring and parameters.
• Validate IBC v2 message flow (e.g. multi-hop MsgTransfer) between two Cosmos SDK v0.53 chains.

3. Testnet & QA

• Deploy on rebel-2 testnet with v0.53.x + IBC v2 enabled.
• Run: – Channel/connection handshake tests. – ICS-20 token transfer tests. – IBC v2 message routing tests (two-chain environment).
• Further tests on Wasm and SDK messages to verify continued normal operation after the upgrade.
• Publish test results and known issues for dApp developers and validators.

4. Documentation

• Update validator runbooks for single-step upgrade to v0.53.x.
• Document breaking changes if any
• Provide examples of IBC v2 message format for integrators.

Comparison to Previous Proposal

Budget

The total budget for this combined upgrade is $56,000 USD, split into two phases to ensure accountability and align with deliverables:

• Phase 1: Testnet Implementation & Validation — $40,000 USD – Code migration directly to Cosmos SDK v0.53.x (including CometBFT v0.38.x, Wasmd v0.61.x and IBC-Go v10.x). – Rebel-2 testnet deployment and monitoring. – Extended IBC v2 (Eureka) message testing between two SDK v0.53 chains. – Publication of preliminary documentation and dApp guidance.

• Phase 2: Mainnet Execution & Post-Upgrade Support — $16,000 USD – Preparation of mainnet upgrade governance proposal. – Validator coordination and upgrade support. – Mainnet upgrade execution and immediate post-upgrade monitoring.

Incremental Effort: The additional $8,000 USD (compared to the original $48,000 proposal) accounts for:

• Migration to SDK v0.53.x instead of v0.50.x.
• IBC-Go v10.x and IBC v2 (Eureka) enablement.
• Longer testing phase to validate IBC v2 functionality.

The LUNC equivalent for each phase will be calculated at the time of its respective community spend proposal submission.

Timeline

Note: This plan adds ~2 weeks to the original v0.50.x proposal timeline, ensuring sufficient time for IBC v2 validation before mainnet rollout.

Risks & Mitigation

• SDK v0.53.x introduces three optional features:Mitigation: Disable x/protocolpool and x/epochs modules, as well as unordered transactions (disabled by default). These can be enabled at a later time if governance decides they are needed.

• IBC v2 Interoperability Bugs:Mitigation: Full e2e tests with two / three Cosmos SDK v0.53.x chains to ensure packet flow works as expected.

An extended two-week testnet phase will be conducted to ensure IBC v2 works properly and that additional features of Cosmos SDK 0.53.x are correctly disabled.

Outcome

When completed, Terra Classic will:

• Run the latest stable Cosmos SDK release (v0.53.x). – Be fully IBC v2 (Eureka) capable and hub-route ready.
• Save the community from a second upgrade event, reducing downtime and coordination overhead.
• Provide a validated and documented upgrade path for validators and dApps.