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Do Kwon Has a New Plan (Again)

Date:

May 17, 2022       /       Unchained Daily       /       Laura Shin

Daily Bits✍️✍️✍️

  • Former U.S. Fed Chairman Ben Bernanke sees no value in Bitcoin.
  • Algorithmic stablecoin DEI loses the $1 peg.
  • Celsius announces plans for an IPO of its bitcoin mining subsidiary, Celsius Mining.
  • Binance loses more than $1.5 billion in LUNA investments.
  • Cloudflare is going to run Ethereum PoS validator nodes on its network.

Today in Crypto Adoption…

  • 44 countries meet in El Salvador to discuss financial inclusion and Bitcoin benefits.
  • UK Treasury confirms plan to regulate stablecoins.
  • Spotify tests NFT features on its platform.
  • German regulator calls for DeFi laws.
  • Portugal considers introducing capital gains tax for crypto.
  • Australian Taxation Office (ATO) warns crypto and NFT investors about tax obligations.

The $$$ Corner…

  • Crypto trading platform Voyager Digital raises $60 million.
  • Oasis Pro raised $27 million for their crypto securities trading platform.
  • Metatheory, a GameFi company, raised $24 million from major VC firms.

What Do You Meme?


What’s Poppin’?

On Friday, after the Terra downfall, Do Kwon proposed an initial plan to revive the network, which consisted of forking the chain and distributing a new token among LUNA and UST holders. However, his idea received a lot of criticism. Ethereum creator Vitalik Buterin said, “Algostable has become a propaganda term serving to legitimize uncollateralized stables.”

On Monday, after “taking feedback from the community,” Kwon formally proposed on a Terra forum a new path forward, called the “Terra Ecosystem Revival Plan 2.”

His plan consists of forking the Terra chain into a new chain without the algorithmic stablecoin, as “Terra is more than $UST,” wrote Kwon. The proposal wants to rename the current chain “Terra Classic’ and the current native token LUNA as LUNC (Luna Classic). The new chain, Kwon proposes, would be called Terra, with the native token LUNA.

If this sounds familiar, it is, as the “classic” vernacular is the same naming mechanism used by Ethereum after it forked the chain in 2016 in the wake of the DAO attack. “$UST peg failure is Terra’s DAO hack moment – a chance to rise up anew from the ashes,” Do Kwon said.

In the new chain, LUNA would be airdropped to Luna Classic stakers, Luna Classic holders, residual UST holders, and essential app developers of Terra Classic. In addition, to make Terra “a fully community owned chain,” Do Kwon proposed the TFL wallet to be whitelisted, so that it doesn’t receive any airdrop, and a target inflation rate of 7% through staking rewards.

The new chain would have 1 billion LUNA tokens, as was proposed in the first revival plan, but this time the distribution would be a little different. 25% would go to a community pool, 35% to LUNA holders at “Pre-attack” snapshot, 10% to LUNA holders at the “Launch” snapshot, 25% to UST holders at the “Launch” snapshot, and 5% to essential developers.

The timeline for the next steps is to put out the governance proposal Wednesday and to launch the new network on May 27th.

Speaking of Terra, after a lot of speculation, the Luna Foundation Guard, the group that was charged with maintaining the UST peg via a $3 billion reserve pool, finally gave some clarity on what happened with the bitcoins and other cryptocurrencies that were held in their custody.

According to an announcement, when UST started de-pegging, LFG began to convert its reserves to UST in order to defend the peg, as was intended. Before the attack, the foundation held over 80,000 bitcoin ($3.1 billion). Because of the massive sell off, it almost completely exhausted their bitcoin reserves, leaving only 313 bitcoin ($8 million).

“The Foundation is looking to use its remaining assets to compensate remaining users of $UST, smallest holders first,” LFG said on Twitter-


Recommended Reads

  1. Crypto analyst Tascha Che on lessons from the Terra fallout.
  2. Mario Gabriele, from The Generalist, on why blockspace matters.
  3. Crypto influencer punk6529 on bear markets.

On The Pod…

Unchained - Ep.352 - Why Terra Collapsed and Whether an Algo Stablecoin Can Ever Succeed

Nic Carter, general partner at Castle Island Venture, Eric Wall, former Chief Investment Officer of Arcane Assets, and Erik Voorhees, founder of ShapeShift, discuss what happened with the TerraUSD (UST) and LUNA fiasco, Do Kwon’s responsibility, the impact on the crypto ecosystem, and much more. Show highlights:

  • how Erik used to feel that algo stablecoins were impossible and why he changed his mind
  • why Eric considers that the demand for UST was tied to a sh*tcoin
  • why Nic didn’t think LUNA would work
  • how a stablecoin could theoretically be decentralized
  • whether Nic, Eric, and Erik think this was a deliberate attack
  • why they think whether or not there was a deliberate attack is not even relevant
  • how the de-peg started with a liquidity issue on Curve
  • why Nic thinks that Terra’s biggest mistake was the 19.5% APY on Anchor
  • whether pursuing a decentralized stablecoin is a worthy goal
  • what aspects of UST were decentralized, according to Erik
  • whether algo stablecoins are dead or whether in the future, death spirals of algo stablecoins can be avoided
  • why Erik believes that everything in the crypto space is an experiment, even BTC
  • what it says that the VCs behind Terra knew were so reputable
  • why Do Kwon’s arrogance and inexperience might have caused this chaos
  • whether Terra can be rebuilt
  • whether this collapse imposes risks on other blockchains and other assets
  • why the Luna Foundation Guard’s purchase of Bitcoin might have made the UST collapse even worse
  • what Erik thinks about the global financial system and the US dollar
  • how this event could trigger more regulation in the crypto space and why it might hurt the entire ecosystem
  • how regulators might use the Terra case to impose CBDCs.

Book Update

My book, The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze, which is all about Ethereum and the 2017 ICO mania, is now available!

You can purchase it here: http://bit.ly/cryptopians

  • Coinsmart. Europe’s Best Bitcoin and Crypto Exchange.Click Here
  • Platoblockchain. Web3 Metaverse Intelligence. Knowledge Amplified. Access Here.
  • Source: https://unchainedpodcast.com/do-kwon-has-a-new-plan-again/

This Post was originally published on Unchained

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