Terra CEO Do Kwon said that the shutdown is temporary and that he will find a way to revive LUNA. After only a few hours, he had his proposal.
LUNA and UST have experienced the most disastrous days in the crypto space. True to the saying “built in 4 years, collapsed in 4 days“. Both LUNA and UST were devalued and slid to zero as investors sold off tokens leading to the Terra blockchain shutting down and typical exchanges like Binance removing the LUNA and UST trading pairs.
Do Kwon’s confession
There have been several confirmation communities and groups discussing the ford launch of Terra chain to make the ecosystem complete independent of the UST. Do Kwon gave his opinion as follows:
As of this moment, there are still several billion dollars of UST and the value of Luna has essentially dropped to 0. Even if the rate is eventually restored after marginal buyers and sellers have finally invested. privately, the holders of Luna have been liquidated and diluted so severely that it is very difficult for us to rebuild the ecosystem from the ashes. In a decentralized economy that needs decentralized money, users have lost too much trust in UST.
So what’s left? While UST has been at the heart of Terra’s growth story over the past year, the Terra ecosystem and its community are what should be conserved.
- We’ve built one of the largest and most vibrant developer ecosystems in crypto, with some of the brightest minds in the world working on UI/UX products the best
- Terra Station has a large installation base, with more than a million users around the world
- Despite its struggles, strong brand recognition and a name that almost everyone in the world will have heard of
The Terra community must reset the chain to preserve the community and developer ecosystem
Validators should reset network ownership to 1B tokens, distributed between:
- 400 million (40%) for Luna holders prior to depeg (at Binance prices), bLuna, LunaX and Luna held in the contract must also be the recipient, minus the Terraform Labs account at terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6. The new chain should be owned by the community. Maintaining good ownership of the network among the people who trust it and build the strongest network is important.
- 400 million (40%) to UST holders pro rata at the time of new network upgrade. UST owners need to be perfected as much as possible
- 100 million (10%) to Luna holders at the end of the chain pause – last minute Luna buyers should be compensated for their role in trying to provide stability to the network
- 100 million (10%) to the Community Team to fund future development.
- All Luna beyond the third batch should be staked in the network initialization state.
- The network should incentivize its security with a reasonable inflation rate, such as 7% for Validator, as the fee would no longer be enough to pay for the security without the swap fee.
Call to action
Why does this redistribution make sense? UST holders need to own a large portion of the network, as the debt holders of their network deserve compensation for the tokens they held until the end.
Terra needs a community to continue to grow and make its block space valuable again – the only way to do this is to ensure that token holders before the attack begins, the the community’s most loyal members and builders, always following closely to continue providing value.
It’s a difficult balance – and there are no easy answers in terms of redistributing value in the network. But value must be delivered to allow the ecosystem to exist, which in its current state is not.
The Future of the Terra network
The rallying call for the Terra community has always been “a decentralized economy that needs decentralized money”. This is an exciting vision, and although UST has not yet been successful, the Terra community will look to echo the idea at some point in the future.
But the priority now is to preserve this amazing ecosystem and create as many users and builders as possible. First, Terra should preserve its L1, and the community should gather to discuss decentralized money once the dust has settled.
I hope the community can reach consensus quickly on how to revive the Terra ecosystem. I will always be here.
Those are the words that Do Kwon said after Binance made the move to reopen LUNA/BUSD & UST/BUSD trading at 21:00 last night.