Grasping at Straws - Kwon's New Proposal to Attempt to Save Terra - News Brief
Terra founder Do Kwon, after two days of silence following his tweet of a plan unsavory to community members to save Terra, advances yet another plan. With LUNA tokens practically at zero, Kwon remains diligent in his attempts to save the failed ecosystem.
His proposal, which was in response to validator groups discussing the possibility of forking the Terra chain, involves compensating UST and LUNA holders who were unable or unwilling to sell their holdings during this week’s price collapse. Kwon proposed that validators should reset network ownership to 1 billion tokens distributed among LUNA and UST holders as well as a community pool to fund future development. Specifically, 40% of the newly distributed tokens would go toward LUNA holders who held the asset before the depegging event; 40% would go towards UST holders on a pro-rata basis at the time of the new network upgrade; 10% would be allocated to LUNA holders just before the chain halted operations and the remaining 10% would go toward the development pool.
[Bourgi, S. Breaking: Do Kwon proposes Terra revival, including token redistribution plan. (Accessed May 13, 2022)].
According to Kwon, as regards UST, trust in his mechanism of stablecoins has been permanently eroded due to the mass liquidity events surrounding LUNA and the rest of the Terra ecosystem. Explaining this, Kwon stated:
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.
[Id].
At it's height, Terra's UST was valued at almost $19 billion, but today, one single UST has crashed to $0.13. Kwon has recognized that there is absolutely no way to restore Terra's value as a blockchain so accordingly "Kwon said the redistribution plan has to compensate the network's debt holders and 'loyal community members and builders" [Id].
Final Thoughts
Kwon is grasping at straws in his attempts to save Terra. With regard to Terra, something possibly could be salvaged from what remains after this massacre, but, in my humble opinion, the death knell has already rang for UST.
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