Terraform Labs CEO proposed plan to revive the Terra ecosystem
Do Kwon’s idea involves paying compensations to UST and LUNA holders who were unable or unwilling to sell their assets during the collapse of prices
14.05.2022 - 08:00
707
2 min
0
What’s new? Terraform Labs co-founder Do Kwon made a proposal to restore the Terra ecosystem after the UST stablecoin lost its peg to the dollar and its rate had been dropping to $0,03. Kwon’s idea involves paying compensations to UST and LUNA holders who were unable or unwilling to sell their assets during this week’s price collapse.
Information on the Terra website
What plan has Kwon voiced? He suggested that validators restart the network with 1 billion tokens distributed to LUNA and UST holders, as well as a community pool to fund future development.
- 40% of the distributed tokens would be received by holders who held UST at the time of its depegging from the dollar;
- 40% would go to UST holders on a pro-rata basis at the time of the network upgrade;
- 10% would go to LUNA holders at the time of the network halted operations;
- 10% would be allocated to the project development fund.
As of May 14, UST is trading at $0,14, having added more than 20% in value per day, according to Binance.
What events happened before? On May 8, the UST stablecoin lost its peg to the US dollar and continued to fall over the following week, hitting $0,03. The rate of the LUNA token securing it also collapsed to almost zero at $0,00002.
On May 9, the Luna Foundation Guard (LFG), a non-profit organization created to support the Terra ecosystem, reported plans to regain the pegging of the stablecoin to the dollar. The LFG would provide a $750 million BTC loan to over-the-counter trading firms, as well as a $750 million UST loan to accumulate bitcoins as the market normalized.
On May 12, Terra reported that it would burn 1,38 billion UST to regain the pegging. The LFG issued nearly 7 trillion LUNA tokens to protect against attacks and capture control during the voting.
On May 13, the Terra network suspended operations to develop an ecosystem recovery plan. The Terra community later proposed rolling back the network before the collapse of the UST rate.
Useful material?
Market
The company’s unrealized profits from investing in its first cryptocurrency approached $14 billion
Nov 19, 2024
Incidents
The search, the reason for which was not announced, took place a week after the election, the results of which Polymarket users predicted quite accurately
Nov 14, 2024
Market
Analysts point to the growing popularity of the first cryptocurrency as a safe haven asset
Nov 13, 2024
Market
The product will begin trading on the Swiss Exchange on November 19
Nov 12, 2024
Market
The company’s unrealized profits from investing in the first cryptocurrency approached $13 billion
Nov 12, 2024
Market
The company predicts that the rate of the first cryptocurrency will grow to $200 000 by the end of next year
Nov 11, 2024