Do Kwon has introduced his plan to revive the embattled cryptocurrency project
After nearly two days of silence and a long talk with advisors, including CZ – CEO of Binance exchange, Do Kwon’s account on the Terra Research forum has voiced a new proposal to revive the Terra ecosystem.
5/ There are multiple proposals on Agora on the best steps to move forward for the community – after having read many of them, I’ve put down my thoughts of what I think the best steps are: https://t.co/pJNXATzllz
— Do Kwon 🌕 (@stablekwon) May 13, 2022
Terra proposes to revive LUNA and makes no mention of UST
Terraform Labs CEO Do Kwon spoke out on Twitter, saying that the “silent” period of the past 72 hours was to call the community, the project, and those affected by the UST’s depreciating value. via. He wrote:
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
Even so, the CEO still believes that a decentralized economic model requires a decentralized stablecoin, but it is clear that in the current situation, UST will not be that stablecoin. Do Kwon also denied rumors that he or his affiliated organizations made a profit during this time; he did not sell LUNA or UST during the crisis.
Kwon also mentioned the proposal to rebuild the Terra blockchain and the LUNA coin he posted to the community. The CEO said that the top goal of the project at the moment is to retain the community of users and developers, thereby agreeing on the next direction and reconstruction.
First, this very account admitted that the current situation of LUNA and UST was now beyond salvageable.
“As of this time, there is still several billion dollars worth of UST, and the value of Luna token has fallen to essentially zero. Even if the peg were to eventually restore after the last marginal buyers and sellers have capitulated, 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”, the proposal stated.
In such circumstances, the Terra community has been vocal about the hard fork solution to rebuild it all; this proposal by Do Kwon was created to further clarify that direction. Specifically, the total token supply will be reset at 1 billion LUNA, divided as follows:
- 400M (40%) to Luna holders before the de-pegging event (last $1 tick before the depeg on Binance should be reasonable), bLuna, LunaX and Luna held in contracts should also be recipients, minus the Terraform Labs account at terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6. The new chain should be community-owned.
- 400M (40%) to UST holders pro-rata at the time of the new network upgrade. UST holders need to be made whole as much as possible.
- 100M (10%) to Luna holders at the final moment of the chain halt – last-minute marginal luna buyers should be compensated for their role in providing stability for the network.
- 100M (10%) to the Community Pool to fund future development.
- All Luna besides the third tranche should be staked at the network genesis state.
- The network should incentivize its security with a reasonable inflation rate, say 7%, as fees will no longer be enough to pay for security without the swap fees.
In addition, this proposal does not mention the plan for stablecoin UST, which means that Do Kwon has accepted that the option of “sacrificing LUNA to save UST” has been applied for the past two days, causing the circulating supply of LUNA to increase from 400 million to 6.9 trillion, which is useless.
However, it should be noted that this is just a suggestion in Terra’s community forum, has not been confirmed by any official channel, nor is it timed to be approved. At the same time, there is no guarantee that this model will work effectively when investors’ confidence in this ecosystem has gone up in smoke.
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