Terraform Labs CEO opposed the burning of LUNA tokens

What’s new? Terraform Labs CEO Do Kwon called the burning of LUNA tokens a bad idea. In his view, it will not restore the Terra ecosystem, furthermore, the holders will lose their assets. Despite this statement, the Terra CEO has provided a wallet address for the burn of LUNA coins. Do Kwon reported this on Twitter.

To clarify, as I’ve noted multiple times i dont think sending tokens to this address to burn tokens is a good idea - nothing happens except that you lose your tokensWant there to be no confusion whatsoever https://t.co/GrzG9cclAr— Do Kwon 🌕 (@stablekwon) May 23, 2022

What is cryptocurrency burning? It is the process of removing a certain number of tokens from circulation, after which they become permanently inaccessible. Often burning is carried out in order to increase the rate of an asset or prevent it from inflation. Burning can be done by sending tokens to a wallet without a private key, by conducting a hard fork, using special software, or using algorithms that destroy some of the funds during transactions.

What events happened before? On May 8, 2022, the TerraUSD (UST) stablecoin began losing its peg to the US dollar, and on May 11 its price dropped to $0,22. As of May 23, UST is trading at $0,06, while its backing token LUNA is at $0,0001 (according to Binance).

On May 13, Do Kwon made a proposal to restore the Terra ecosystem. His idea was to compensate UST and LUNA holders who were unable or unwilling to sell their assets during that week’s price collapse.

On May 16, Do Kwon proposed to conduct a hard fork of the network. According to Kwon’s plans, the new chain would not be linked to the UST stablecoin, and the old one would continue to exist under the name Terra Classic (LUNC). The vote was set for May 18.

91% of the Terra community members opposed the Terraform Labs head’s proposal to conduct a hard fork of the network in a preliminary vote. Also in the comments, many supported the plan to burn LUNA tokens.

Do Kwon made changes to his Terra recovery proposal during the voting process. He suggested changing some of the parameters of the fork in terms of coin distribution.

For a detailed timeline of events in the wake of the Terra ecosystem collapse, see GetBlock Magazine’s article.