Vitalik Buterin, the co-founder of Ethereum, has commented that the scandal-hit Terra (LUNA) project should be more protective of small investors than big ones. especially after the compensation plan was issued recently.
The Terra ecosystem previously had a shocking collapse on May 9. This resulted in a 100% drop in the price of LUNA and Terra USD (UST) stablecoin lost its USD fix (priced at $0.16 at the time of writing).
As investors of LUNA and UST suffer massive losses The community is therefore looking for ways to rebuild the ecosystem. and may be able to help many people who are affected.
One of the community’s proposals is to repay the principal of UST holders to minors in case the valuation begins to stabilize again. In order to build the morale of the coin holders and to regain confidence in the project again before planning to help big investors later It is estimated that this aid will require a minimum of $1-1.5 billion.
Buterin expressed support for the idea via Twitter on May 15. It emphasizes helping retail investors who want to spend their money before taking it to the next level. By saying large investors can better absorb losses.
“There should be a lot of compassion and relief for retail UST investors, especially those who have been told stupid things about the ‘20% interest rate on the US dollar’ from personal responsible influencers. and would like to express our condolences for the loss of a large group of investors.”
While the Ethereum co-founder clearly isn’t calling for regulation. He stressed that potential protections such as financial deposit insurance It might be helpful in these situations.
“Interestingly unrelated is Singapore’s employment law that would have more stringent regulations for low-income workers. and there will be a way for the high-income groups to come up with solutions for themselves Personally, I think a concept like this is a good hybrid formula,” he said.
At this stage, it is unclear whether the project will be able to rehabilitate or not. or aiming to temporarily resurrect to compensate investors. It’s also worth noting that Buterin’s opinion-related offers are updated throughout the week. And it is currently weighing payouts to all coin holders of up to $50,000 per wallet.
Another idea circulating online is to develop a hard fork upgrade for the Terra blockchain called “TERRA 2,” while also launching a liquidity pool to bring UST back to its pinnacle.
Binance founder and CEO Changpeng Zhao criticized the idea on Twitter over the weekend, saying, “Forking doesn’t value the new forked blockchain at all. That was just hope.”
Prior to the collapse of LUNA and UST, the Luna Foundation Guard held approximately $2.7 billion worth of Bitcoin (BTC). And they came up with the idea of a pool to create a new UST. This led CZ to question “where is all the BTC that should be used for reserves?”
Terraform Labs founder Do Kwon, who reappeared online late last week. It proposed the creation of Terra’s blockchain to reset “network ownership” and distribute 1 billion LUNA tokens to the community.
Kwon’s “Terra Ecosystem Revival Plan” proposal has received a strong response from popular figures in the crypto community, such as Dogecoin co-founder Billy Markus, who called for Kwon to step out of the sector, and also set aside the following: Also notice that:
“If they want to pay the victims of their failed protocol. Instead of using new money from new victims They should use the money they have already received from their investors to repay them.”
