Co-founder and the big man behind it Ethereum (ETH) network, Vitalik Buterin, has recently spoken out about the demise of Terra (LUNA) and the UST stablecoin. According to Buterin, the Terra project should focus on small investors, not on investment in any investor compensation plan whales.
Terra compensation
As widely reported, the Terra ecosystem virtually bled to death around May 9, causing Terra to plummet 100% and the TerraUSD (UST) stablecoins lost its peg to the US dollar. At the time of writing, UST is still worth just $0.16.
The community is now looking at how the Terra network could possibly be revived. Part of a possible plan would also compensate investors who suffered huge losses after UST collapsed. For example, it is argued that at least part of the original UST balance of investors should be compensated. This would cost between $1 and $1.5 billion.
Vitalik Buterin took to Twitter to say that he is behind this plan. According to him, it is important that UST holders are compensated. However, according to Buterin, it is important that especially small investors receive attention here. According to Buterin, they are the ones who need the money the most. Whales could absorb the blow a lot better, according to the Ethereum founder.
“Coordinated condolences and relief for the average UST holder who was told something stupid about an influencer’s ‘20% interest on the US dollar’, personal responsibility and ‘Sorry For Your Loss’ (SFYL) for the wealthy.”
Strongly support this. Coordinated sympathy and relief for the average UST smallholder who got told something dumb about “20% interest rates on the US dollar” by an influencer, personal responsibility and SFYL for the wealthy. https://t.co/YfNlpvAizg
— vitalik.eth (@VitalikButerin) May 14, 2022
LUNA recovery
Whether such a plan will actually be implemented is, of course, still unknown at this stage. Restoring the Terra network will cost a lot of money and it is unclear where this money should come from. In addition, trust in the network has also simply dried up to a large extent.
Another idea being floated online is the development of a hard fork upgrade for the Terra blockchain called “TERRA 2,” while also launching a liquidity pool to bring UST back to its peg. Including Binance CEO, Changpeng Zhaohowever, sees no point in this plan at all.
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