Do Kwon Has a New Proposal for Terra Ecosystem

Do Kwon, Terra’s co-founder, has revealed a revival plan that will see the Terra community abandon the UST stablecoin completely. Instead, Do Kwon suggests that validators re-establish network ownership using a new token. They fork the chain and distribute it to compensate all parties.

Do Kwon says UST has failed

Kwon argued Friday in a forum post that Terra (LUNA), has become so diluted that it cannot be rebuilt with TerraUSD(UST). Even if UST’s peg recovers.

UST was the third-largest US dollar stablecoin, and LUNA was a governance token which supported UST’s peg. Each coin has fallen by 84% or 99% respectively this week.

According to the co-founder, the collapse of UST has destroyed trust in the company so that it cannot be used as the “decentralized money” they hoped.

Kwon wrote that Terra’s growth story has been centered around UST over the past year. However, Terra’s ecosystem and its community are what is important to preserve.

The creator proposes to fork the chain and reset network ownership to only 1 billion tokens – a decrease from the 6 trillion LUNA tokens in circulation.

Terra Community Compensation

Specifically, 400,000,000 Terrafork tokens will be distributed to LUNA holders who were present at the time that UST was first de-pegged. Terraform Labs will not be included in this distribution, however Kwon plans to make the new chain “community-owned”.

To make Terra’s debt holders whole, another 400 million tokens will also be given to UST holders during the upgrade.

The remaining 100 million will be given to LUNA’s final holders, prior to the Terra chain being halted. The last 10% will be dedicated to the community pool.

Kwon believes Terra will find a way to use “decentralized money” in the future to replace UST.

He concluded, “I hope that the community can reach speedy consensus about how to revive Terra ecosystem.” “I will always be there.”

These plans are a complete reversal of Kwon’s original UST recovery strategy, which was based on increasing UST burn rate.