(Bloomberg) — Terraform Labs is working on ways to keep its Terra blockchain and ecosystem going despite the collapse of its cryptocurrency stablecoin, according to a blog post attributed to co-founder Do Kwon.
The proposal includes the redistribution of ownership of the blockchain network to investors who saw the value of their TerraUSD stablecoin and Luna tokens get wiped out this week. The proposition, titled “Terra Ecosystem Revival Plan,” would distribute 1 billion new Luna tokens to UST and Luna holders.
Kwon didn’t immediately respond to requests for comment made over Twitter and Telegram.
Whether the proposal would save the blockchain remains in question. The network had relied heavily on investors’ confidence to make its algorithmic stablecoin work before the meltdown.
“Even if the peg were to eventually restore after the last marginal buyers and sellers have capitulated, the holders of Luna have so severely been liquidated and diluted that we will lack the ecosystem to build back up from the ashes,” Kwon is cited as saying in the commentary.
If passed, the proposal also raises other questions such as how centralized exchanges that allow trading of Luna and UST would be able to distribute the new tokens to their users.
(Adds details from the proposal starting in the second paragraph.)
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