Terraform Labs CEO and co-founder Do Kwon proposed a plan to address the fallout from the collapse of the UST stablecoin and the LUNA token.
“The Terra community must rebuild the network to preserve itself and the ecosystem of developers,” Kwon stressed.
At the time of writing, the volume of the LUNA supply exceeds 6.5 trillion. Due to high inflation and heavy selling over several days, the price of the Terra ecosystem’s native token has effectively collapsed.
At the time of writing LUNA traded at $0.00018566. Not long before the crash the token price exceeded $80.
The price of the algorithmic stablecoin UST remains around $0.15.
In an effort to change the situation, Kwon proposes restarting the network with 1 billion tokens to be distributed as follows:
- 40% of the coins — to LUNA holders at the moment of UST’s detachment from the US dollar;
- 40% — to UST holders at the moment of the network update;
- 10% — to LUNA holders at the moment of the network halt;
- 10% — to the project development fund.
Soon after publication of the proposal, Kwon said he was “heartbroken” that his invention had ultimately caused a lot of pain to the community.
2/ I still believe that decentralized economies deserve decentralized money – but it is clear that $UST in its current form will not be that money.
— Do Kwon 🌕 (@stablekwon) May 13, 2022
“I still believe that decentralized economies deserve decentralized money. But it is clear that in its current form UST will not become such money,” he wrote.
Kwon assured the community that neither he nor the organizations associated with him “profited in any way from this incident.”
3/ Neither I nor any institutions that I am affiliated with profited in any way from this incident. I sold no luna nor ust during the crisis.
— Do Kwon 🌕 (@stablekwon) May 13, 2022
“I did not sell LUNA and UST during the crisis,” wrote Kwon.
He stressed that the project team is currently working on many questions, including the use of the Bitcoin reserves of the Luna Foundation Guard.
4/ We are currently working on documenting the use of the LFG BTC reserves during the depegging event. Please be patient with us as our teams are juggling multiple tasks at the same time.
— Do Kwon 🌕 (@stablekwon) May 13, 2022
In May, the algorithmic stablecoin UST lost its peg to the US dollar. This occurred amid asset withdrawals from the Anchor protocol due to the deposit yield dropping to 17.87%.
On May 10, the asset’s quotes again fell below $0.62. The decline continued on May 11, after which the cryptocurrency used to mint UST, LUNA, fell to $0.30.
Later, Terraform Labs CEO Do Kwon presented a plan to restore UST’s price. Among the necessary steps he named “absorption of the supply from UST holders wishing to exit the asset.”
On May 12, CoinDesk reporters learned that Do Kwon was one of the anonymous co-founders of the failed algorithmic stablecoin Basis Cash.
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