After being completely off the radar for almost 3 days, Do Kwon finally comes out of the silence to take stock and establish a solution. Saying he is “heartbroken”, he proposes to give the reins of the ecosystem to the developers and the community by forking the Terra blockchain. This would involve issuing a new token that will be redistributed to LUNA and UST holders.
A speech from Do Kwon that we were expecting more of
Many were waiting for it. Since the beginning of the long agony of the UST and then the LUNA, which gradually drew each other in a downward spiral, the Terra community was waiting for a word from Do Kwon, the founder of the blockchain.
Indeed, after the UST started to depeg (lose its leading value of $1) on May 9, Do Kwon only intervened on May 10 and 11, first to try to calm the prevailing panic, then to announce a first solution.
“Close to announcing a recovery plan for $UST. Hang on” he tweeted on the afternoon of 10 May, at a time when the UST had dropped 10 cents to $0.90, a situation that still seems light today. The LUNA was still close to $30 at the time.
The next day, in the early hours of May 11, a new message was sent to reassure the community: “We are getting closer… Stay strong, Lunatics. [Stay strong, Lunatics”. Later that day, he made a long thread to report on the situation and announce the possible collateralisation of the UST.
Then Do Kwon was completely off the radar for almost 3 days, an interminable wait for those who had been holding out – following his advice – wondering at every moment if UST was going to go up.
He finally came back to speak this morning, announcing that he was “heartbroken” and that he had not benefited financially from the situation.
The state of affairs and the future of Terra
Do Kwon’s exit is now a bit more pessimistic, and probably more appropriate to the reality of events. At the time of writing, the UST is down to $0.14 and the LUNA is a disastrous $0.00018, which seems unreal compared to its ATH (highest price) of $120 at the beginning of April.
I still believe that decentralised economies deserve a decentralised currency – but it is clear that the UST in its current form will not be that currency. Neither I nor the institutions I am affiliated with have profited in any way from this incident. I did not sell either LUNA or UST during the crisis. “
He also announces that Terra’s teams will soon develop how Terra’s then-billion-dollar stash was used to secure the UST peg:
“We are currently working on documenting the use of the Luna Foundation Guard (LFG) Bitcoin (BTC) reserves during the depeg phase. Please bear with us as our teams juggle multiple tasks at once. “
Faced with disaster, he proposed a solution on Agora, Terra’s forum dedicated to its evolution, to try to save what’s left of the ecosystem, or at least its fundamental structure.
“What we should be looking to preserve now is the community and the developers who give value to the Terra blockspace – I’m confident that our community will form a consensus around the best path forward for itself, and find a way to rise again. “
The solutions being considered at the moment
Do Kwon’s proposal, called the “Terra Ecosystem Recovery Plan”, focuses on preserving the community, which includes developers and users.
“We have built one of the largest and most vibrant developer ecosystems in cryptocurrency, with some of the smartest minds in the world working on products with the best UI/UX. Terra Station has a large install base, with over a million users worldwide. “
Also, the best solution according to the founder would be to fork the blockchain in order to redistribute the governance of the network via a billion new tokens distributed between :
- 40% : LUNA holders before the depeg begins;
- 40% : UST holders by pro-rating;
- 10% : LUNA holders before the blockchain stops;
- 10%: Funds dedicated to the future development of the ecosystem.
Thus, Do Kwon wishes to privilege the part of the community that has always supported the ecosystem via LUNA tokens, while rewarding those who bought LUNA during the raid.
In conclusion, although the situation has already been dramatic for many people from a financial point of view, the foundations of Terra may not be abandoned. To be continued.
