Friday May 13, 2022

After a short absence from Twitter and social media, Terra co-creator Do Kwon emerged on Friday to propose an “ecosystem revival plan” for the network.

In it, he suggests that UST is not coming back—and the Terra blockchain must redistribute tokens to move forward.

“The holders of Luna have so severely been liquidated and diluted that we will lack the ecosystem to build back up from the ashes,” writes Kwon on the Terra research forum. “While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role.”

Instead of building back with UST, Kwon proposes revitalizing the network around the Terra blockchain network: “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.”

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To “preserve the community and the developer ecosystem,” Kwon proposes resetting the distribution of the network’s LUNA governance tokens to 1 billion, 40% of which would be redistributed to holders before Terra’s UST stablecoin became de-pegged from the U.S. dollar.

Another 40% will go to those who hold UST at the time of the upgrade. A further 10% would go to LUNA holders when the blockchain was paused this week. The remaining 10% would be used to pay for future development on the network.

The price of LUNA fell nearly 100% in the span of a few days as UST, the stablecoin it backs, slipped from a $1 peg. LUNA is now trading for a fraction of a penny, while UST is selling for $0.15 on the dollar.

See also  Secretary Yellen; UST Collapse Could Have Been Avoided With The Available Legal Framework

Editor’s Note: This news is developing, and the article is being updated.

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