Terra ecosystem ‘resuscitation’ plan wants to redistribute network ownership3 min read
The collapse of the Terra ecosystem (LUNA) impacted the entire market and now the project is trying to pick up the pieces and rebuild itself.
Days after LUNA plummeted to practically zero and the stablecoin UST lost its parity with the US dollar for good, Terraform Labs co-founder and CEO Do Kwon presented his “Terra Ecosystem Revival Plan”.
Terra Ecosystem Revival Plan
The proposal provides for a redistribution of tokens to LUNA and UST holders, placing them at the center of the ecosystem.
“The Terra community must rebuild the chain to preserve the developer community and ecosystem,” Kwon wrote.
This week, the market saw the entire Terra ecosystem collapse. First, the stablecoin UST stopped trading at $1 and lost its backing against the dollar. Today, the stablecoin is priced at $0.16
Shortly after the episode, the price of LUNA plummeted before the eyes of investors, from $80 just a week ago to the current $0.0004053.
Plan does not involve UST
According to Kwon’s plan, the restructuring of the project would correspond to a kind of fork – a true restart of the Terra blockchain.
According to the CEO of Terraform Labs, while a decentralized economy needs decentralized money, stablecoin UST has lost trust with its users.
So even though stable digital currency has been the focal point so far, “Terra ecosystem and its community is what is worth preserving,” he said.
Redistribution of Tokens
In this scenario, he proposed that 1 billion tokens be distributed among various parts of the community. He explained that this would be necessary due to the runaway inflation of Luna tokens and their relationship with UST.
In detail, Kwon’s plan calls for 40% of the tokens to be sent to Luna holders before the UST is unlinked.
In addition, another 40% of the tokens would be given to UST holders “pro-rata at the time of the new network upgrade”.
Meanwhile, 10% would go to Luna’s holders before the jail suspension. Finally, the last 10% would be given to the “Community Pool to fund future development”.
Focus on the Terra community
As the executive pointed out, this plan makes sense because UST holders need to own a large part of the network. After all, they deserve to be compensated for the tokens they are holding until the end.
“Terra needs a community to continue to grow and make its space valuable again. The only way to do that is to ensure that the token holders before the attack begins, the most loyal community members and builders, remain around to continue providing value.”
Kown recognized that this is a difficult balance and that there are no easy answers in value redistribution. However, for him, value must be distributed to allow the ecosystem to survive. That’s because in the current state that won’t happen.
“I hope the community can reach a quick consensus on how to revive the Terra ecosystem. I will always be here,” he concluded.