The Terra revival plan recently announced by Terraform Labs co-founder and CEO Do Kwon raises questions about the effectiveness of a hard fork to revive the fallen LUNA and UST token prices. mixed reactions were obtained. Instead, some of the community have recommended burning LUNA tokens as the most plausible way to achieve a comeback.
Kwon’s proposal Preserving the Terra ecosystem requires a hard fork of the existing Terra blockchain without an algorithmic stablecoin and redistribution of new versions of LUNA tokens to investors based on historical snapshots prior to the death vortex. However, several crypto entrepreneurs, including Changpeng “CZ” Zhao, commented:
“Supply reduction should be done by incineration, not the old fork, and everyone who was trying to get the coin should throw it away.”
Following constant requests from the crypto community, Kwon opposed his initial plan on May 21st and publicly shared LUNA’s burn address. All LUNA tokens sent to this address will be burned immediately, effectively reducing the circulating supply of LUNA tokens.
To be clear, as mentioned several times, it is not a good idea to send tokens to this address to burn them. Nothing happens other than losing tokens.
I hope there is no confusion https://t.co/GrzG9cclAr
— Kwon Do (@stablekwon) May 23, 2022
Two days after sharing the LUNA burning address, Kwon reiterated his position that “nothing happens except to lose the tokens” and that reducing the circulating supply of LUNA tokens does not affect the market price.
Terra co-founders warned that burning addresses were shared with users for informational purposes only and should not be used.
“I’m happy to provide this for informational purposes, but I want to make it clear that you shouldn’t burn tokens unless you know what you’re doing. I don’t understand.”
However, this disclosure has caused further confusion among investors. As Cointelegraph previously reported, LUNA’s crazy volatility serves as a lucrative opportunity for investors, many looking to make up for losses while others looking to see profitable trades.
Kwon previously confirmed that Terra will no longer issue new LUNA tokens, which is one of the main reasons why investors believe the burn mechanism will boost LUNA prices due to scarcity.
With the resolution roadmap unclear, investors are advised to refrain from making hasty financial decisions as the master plan for Terra’s revival continues to be under public scrutiny.
Relevant: Near Protocol reclaims its slack and mounts Tracer following the fall of Terra.
As a direct result of Terra’s collapse, numerous projects have attempted to migrate to other blockchain ecosystems fighting for survival. The Near Foundation also played a role by recently onboarding Tracer, a Web3 fitness and lifestyle app.
In an interview with Cointelegraph, Nicky Chalabi of the Near Foundation (NEAR) seeks projects like Tracer to align with the core values of the ecosystem, emphasizing:
“The project has to keep an eye on the interests of the community and users, after all, because that is what is most valuable.”
“It can really define your success,” said Chalabi, advising you to migrate your Terra project only after considering the interests of users and the community.