The crash of terra (LUNA) and terraUSD (UST) caused a lot of drama in the cryptocurrency world this week. The UST stablecoin lost its peg (peg) with the US dollar and the algorithm also pulled the price of LUNA downwards. UST came in as low as $0.067 yesterday, down 93%. In fact, LUNA had fallen 99.9% several times this week to a low of $0.000001.
New LUNA proposal
Terra founder Do Kwon, CEO of Terraform Labs, finally spoke up last night. He reports on Twitter that he is “heartbroken” that his invention has caused so much pain. He also says that he did not profit in any way from the incident and did not sell LUNA or UST.
1/ I’ve spent the last few days on the phone calling Terra community members – builders, community members, employees, friends and family, that have been devastated by UST depegging.
I am heartbroken about the pain my invention has brought on all of you.
— Do Kwon 🌕 (@stablekwon) May 13, 2022
Furthermore, the founder refers to a new proposal to save LUNA on the Terra forum. He says the Terra community needs to reconstruct the blockchain to save the developer community and ecosystem.
Kwon suggested that validators would reset the network ownership to 1 billion tokens distributed to LUNA and UST holders, as well as a community pool to finance future development. 40% of the newly distributed tokens will then go to LUNA holders who had the crypto before the decoupling started. 40% would go to UST holders at the time of the new network upgrade. 10% would then be allocated to LUNA holders just before the blockchain stopped working and the remaining 10% would be for development.
UST probably dead
However, Do Kwon admits that trust in UST is likely to be permanently damaged.
“Even if the peg should eventually re-establish after the last fringe buyers and sellers capitulate, Luna’s keepers have been liquidated and watered down so badly that we’ll miss the ecosystem to rebuild from the ground up.”
LUNA price rises 3.250%
Still, UST was able to rise as much as 150% since yesterday’s low. However, at the current price of USD 0.17, UST is still well below its peg to USD. LUNA is also further below its value from early this week, but is recovering to $0.0003 this morning. That is an increase of no less than 3,250% (!) in the past 24 hours.
Bitvavo resumed trading in LUNA/EUR this morning. The Dutch cryptocurrency exchange does, of course, warn against the very high risk and heavy volatility with this crypto.
Terra (LUNA-EUR) trading has been enabled.
Please be aware of the risks and volatility of this asset and trade with caution. The asset will be visible after refreshing the app.
Do not invest with money that you cannot afford to lose. pic.twitter.com/kGeAYdaGgg
— Bitvavo (@bitvavocom) May 14, 2022