Do Kwon proposed a clean slate for Terra without the UST stablecoin with hopes to revive the network after the collapse so let’s read more today In our latest cryptocurrency news.
Do Kwon proposed a revival plan after a short absence from Twitter and social media. In the new plan, he suggests that UST is not coming back and the blockchain has to redistribute tokens to move ahead:
“The holders of Luna have so severely been liquidated and diluted that we will lack the ecosystem to build back up from the ashes. While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role.”
Rather than building back with UST, Kwon proposed revitalizing the network around the Terra blockchain:
“We’ve built up one of the largest and most vibrant developer ecosystems in crypto, with some of the smartest minds in the world working on products with the best UI/UX.”
To preserve the community and the developer ecosystem, Kwon proposed to reset the distribution of the LUNA governance token to 1 billion, or 40% of which will be redistributed to the holders before Terra’s UST stablecoin and become de-pegged from the US dollar in the weekend. Another 40% will go to those that will hold UST at the time of upgrade and another 10% will go to LUNA holders when the blockchain was stopped for a second time in 24 hours. The rest 10% will be used to pay for future development of the network.
The price of LUNA dropped almost 100% in the span of a few days as UST slipped from its $1 peg. LUNA is now trading for a fraction of a penny and UST is selling for $0.15 on the dollar. LUNA and UST are designed to work in tandem with the former kept at $1 via a burn mechansim which encouraged traders to take advantage of the arbitrage opportunities. The interest rates in the network’s primary use case, Anchor Protocol dropped and led to a death spiral. Plenty of other projects on the Terra network are having a hard time with other blockchain signaling openness to absorb these teams into their own network. The network already lost its financial capital and now has to work fast to preserve its human capital.
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