Terra co-founder Do Kwon has revealed a revival plan for the Terra community, completely abandoning the UST stablecoin. Instead, he proposes that validators reset the network ownership with new tokens by forking the chain and distributing it to fairly reward all compromised parties.
UST Failed, Says Do Kwon
in forum post On Friday, Chairman Kwon argued that Terra (LUNA) was diluted to the point where it could no longer rebuild its joint ecosystem with TerraUSD (UST). Even if the peg of UST somehow recovers.
UST was previously the third largest stablecoin pegged to the US dollar, and LUNA was the governance token that supported the peg of UST. Each coin is down 84% and 99% respectively this week.
The co-founders claim that the collapse has completely destroyed trust in the UST and can no longer serve as the “decentralized money” they hoped for.
“While UST has been the central narrative in Terra’s growth story over the past year, the Terra ecosystem and community is something worth preserving,” Kwon wrote.
Therefore, the creators propose to fork the chain and reset network ownership from the more than 6 trillion LUNA tokens currently in circulation to just 1 billion tokens.
Terra Community Rewards
Specifically, 400 million of the tokens of the Terra fork will be distributed to former LUNA holders at the time UST first removed the peg this month. However, this does not include Terraform Labs, as Kwon wants the new chain to be “community owned”.
Another 400 million tokens will be shared with UST holders upon upgrade, making them full to hold Terra’s debt.
The next 100 million will go to the last holders of LUNA before the Terra chain goes down, with the remaining 10% going to the community pool.
Kwon argues that the Terra community will find another way to implement a “decentralized currency” to replace UST in the future.
“I hope the community can reach a quick consensus on how to revive the Terra ecosystem,” he concluded. “I will always be here.”
The outlined plan is a complete reversal from Kwon’s original UST recovery plan, which involved increasing the burn rate of UST.
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