Investing.com – After last week’s proposed ‘bailout’ failed, Do Kwon, the CEO of Terraform Labs, the originator of cryptocurrency, returned to the charge last night, submitting new proposals to avoid the pure and simple disappearance of the UST and the LUNA.
He kicked off with a statement saying “Terra is more than UST” and called the implosion of the Terra network a “chance to rise from the ashes”. According to him, “the ecosystem and its community are worth preserving” and presented the (second) recovery plan as a “living document”.
In Monday’s post and accompanying (NYSE:) Twitter thread, Kwon proposed a fork from Terra to a new blockchain without terraUSD (UST).
Holders of LUNA on the existing blockchain would receive a token from the news under this plan. The old blockchain will continue to operate using the newly renamed luna classic (LUC) token.
Kwon said the new channel will be “entirely community-owned” and that Terraform Labs – Kwon’s company and the creators of Terra – will not be eligible to receive funds as part of the initial token distribution.
The plan will go into effect if approved by token holders. Kwon promised that voting would start tomorrow, Wednesday, May 18. According to the schedule he proposed, the launch of the new network could take place as early as May 27.
Recall that at the beginning of the day on Monday the Luna Guard Foundation, which manages the vast reserves of bitcoins (BTC) of Terra, explained that it had sold almost all of its bitcoins, worth more than $2 billion, in a failed attempt to defend UST parity. This announcement dashed any hope that Terra could use these reserves to substantially compensate investors.
In the statement, LFG notes that it has almost completely depleted its BTC reserves, which have fallen from around 80,000 bitcoins to 313. The remaining assets, which mainly include crashed UST and LUNA tokens, will apparently be used to compensate the investors.
The foundation first recalled the state of its reserves on May 7, before the collapse started:
She then explained in a series of tweets the use of these reserves during the failed rescue attempt of the UST, ending by revealing the extent of the damage by taking stock of her current reserves, almost reduced to nothing:
In the end, therefore, there is only approximately $80 million of other cryptocurrencies – apart from UST and LUNA – left in LFG’s reserves at current prices, a tiny number compared to the objective. of $10 billion set at the beginning of the month.
Note that LFG has denied accusations that it bailed out the whales with its BTC reserves: “There was never an agreement for the ‘insiders’ to come out. of its mandate to help protect the value of the UST”.
It has also agreed that the remaining funds will be used to compensate investors.