CEO and co-founder of Terraform Labs, Do Kwon, presented a plan to resolve the situation around the collapsed UST stablecoin and LUNA token.
“The Terra community must rebuild the web for the sake of preserving itself and the developer ecosystem,” Kwon wrote.
At the time of writing, the supply of LUNA exceeds 6.5 billion. Due to high inflation and massive sales for several days, the price of the native token of the Terra ecosystem has practically depreciated.
At the time of writing, LUNA is trading at $0.00018566. Shortly before the collapse, the price of the token exceeded $80.
The rate of the algorithmic stablecoin UST is holding at $0.15.
Hoping to make a difference, Kwon is proposing to restart the network with 1 billion tokens to be distributed as follows:
- 40% of coins – to coin holders at the time of decoupling UST from the US dollar;
- 40% – to UST holders at the time of the network upgrade;
- 10% – to LUNA holders at the time of network shutdown;
- 10% – to the project development fund.
Shortly after the proposal was published, Kwon said he was “heartbroken” that his invention ended up causing a lot of pain to the community.
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
“I still believe that decentralized economies deserve decentralized money. However, it is clear that in its current form, UST will not become that kind of money.”
Kwon assured the community that neither he nor the organizations associated with him “received any benefit from the incident.”
3/ Neither I nor any institutions that I am affiliated with profited in any way from this incident. I sold no luna nor ust during the crisis.
— Do Kwon 🌕 (@stablekwon) May 13, 2022
“I didn’t sell LUNA and UST amid the crisis.”
He stressed that the project team is now working on many issues, including the directions for using the Luna Foundation Guard bitcoin reserves.
4/ We are currently working on documenting the use of the LFG BTC reserves during the depegging event. Please be patient with us as our teams are juggling multiple tasks at the same time.
— Do Kwon 🌕 (@stablekwon) May 13, 2022
Recall that on May 8, the algorithmic stablecoin UST lost its peg to the US dollar. This happened against the backdrop of an outflow of assets from the Anchor protocol due to a decrease in the rate of return on deposits to 17.87%.
On May 10, the quotes of the asset again fell below $0.62. The fall continued on May 11, after which the LUNA cryptocurrency used to issue UST fell to $0.3.
Later, the head of Terraform Labs, Do Kwon, presented a plan to restore the UST price. Among the necessary steps, he called “the absorption of the offer of UST holders who want to get rid of the asset.”
On May 12, CoinDesk learned that Do Kwon was one of the anonymous co-founders of the failed algorithmic stablecoin Basis Cash.
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