A prominent blue-chip institution is exposing rumors circulating on social media that it was involved in the recent collapse of Ethereum Challenger Terra (LUNA) after the algorithmic stablecoin split from the dollar.
according to new report According to Bloomberg, large institutional investors such as BlackRock and Citadel Securities are protesting against the notion that they were involved in the collapse of LUNA and its stablecoin, TerraUSD (UST).
“The company does not trade stablecoins, including UST,” a Citadel official told Bloomberg. Similarly, BlackRock spokesperson Logan Koffler told Bloomberg, “The rumors that BlackRock played a role in the collapse of UST are completely false. In fact, BlackRock does not trade in UST.”
Terra’s price recently witnessed a massive 99% hyperinflationary drop from $1.00 to $0.0083, urging the blockchain to shut down.
Just 40 days ago, Terra was trading for over $119. LUNA is further down and is moving at $0.00015 at the time of writing.
TerraUSD also saw a massive drop in the dollar after falling to $0.08 and then rebounding to $0.154.
However, Terra founder and CEO Do Kwon says there are plans for the following: Preserve Crypto assets cornered by restructuring the chain and resetting network ownership to 1 billion tokens.
According to Do Kwon, 40% of the remaining tokens should be dedicated to LUNA holders prior to the depegging event, the other 40% should be allocated to UST holders in proportion to the time of network upgrade, and 10% to the previous LUNA purchasers. Blockchain has been allocated 10% of the community pool for future projects.
“Why does this redistribution make sense? UST holders must own a large portion of the network. As debt holders of the network, they are entitled to rewards for the tokens they hold to the end.
Terra needs the community to continue to grow and make the block space valuable again. The only way to do this is to ensure that token holders, most loyal community members, and builders continue to provide value before the attack begins.
This is a difficult balance and there is no easy answer to redistribution of value within the network. But in order for an ecosystem to survive, value must be distributed, and it won’t be the case in its current state.”
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