Terraform Labs co-founder Do Kwon made a proposal to preserve the Terra ecosystem after the Stablecoin UST algorithm collapse and that resulted in the price of Terra token (LUNA) falling to zero.
In Terra Kwon’s Friday post. said “The Terra community must create a new chain to maintain the community and developer ecosystem,” his proposal was made in response to a group of validators discussing the possibility of forking Terra, related to UST holder compensation. and LUNA, who were unable or unwilling to sell their holdings during the downturn this week.
Kwon suggested that the validator should reset network ownership to 1 billion tokens. To distribute to LUNA and UST holders and community groups to fund future developments. In particular, 40% of the newly distributed tokens will be given to LUNA holders who held the assets before the depegging occurred.
40% will go to UST holders in proportion at the time of the new network upgrade, 10% will be allocated to LUNA holders before the chain stops, and the remaining 10% will go to the development pool.
Regarding UST, Kwon said it was unlikely to make a difference given the massive amount of liquidity events across Terra’s ecosystem this week. Trust in the stablecoin model has been permanently destroyed.
“Although the peg must eventually recover after the last buyer and seller surrendered, But the Luna holders have been liquidated and diluted so badly that we lose the ecosystem that will be rebuilt from the ashes.”
But even if there is no way to completely recover the value of the blockchain, Kwon said the distribution scheme must compensate the network’s debt holders and “Loyal community members and creators”
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