After two days of silence, the Terra founder has made a new board proposal to keep the community alive.
Rebuilding the Terra Ecosystem
Terraform Labs co-founder Do Kwon has submitted a proposal to preserve the Terra ecosystem. This plan was announced after Terra’s coin Luna lost peg with its algorithmic stablecoin, UST. This resulted in a downward spiral that caused LUNA to fall to near zero. In a message on Friday on Terra’s forum said Kwon†
The Terra community needs to rebuild the chain to preserve the community and developer ecosystem.
His proposal was in response to a group of validators discussing the possibility of splitting the Terra chain. They want to compensate the UST and LUNA holders who were unable or unwilling to sell their holdings during this week’s price drop.
Kwon suggested that the validators reset the network to 1 billion coins distributed to LUNA and UST holders. In addition, 40% of the newly distributed coins would go to LUNA holders before this event. Another 40% would go to UST holders and 10% would be allocated to LUNA holders just before the chain stopped working. In addition, the remaining 10% would go to the development pool.
Regarding the UST ever converting to the US dollar, Kwon said it probably wouldn’t make a difference. This considering the massive liquidity events in the Terra ecosystem this week. In other words, trust in the stablecoin model has been permanently eroded. He explained:
Even if the dollar peg eventually recovers, Luna’s owners will be so severely liquidated and watered down that we’ll never be able to fully rebuild the ecosystem.
