Do Kwon suggests Terra Revival along with token redistribution strategy

Terra’s founder has introduced a new administration plan to keep the community active and recompense token holders after two days of inactivity.

Do Kwon, co-founder of Terraform Labs, has proposed a plan to save the Terra ecosystem after the historic de-pegging of its algorithmic stablecoin, UST, and the subsequent death spiral that dropped Terra (LUNA) tokens to near-zero.

Kwon stated on Terra’s research forum on Friday, “The Terra community must reconstitute the chain to preserve the community and the developer ecosystem.” In response to validator groups addressing the potential for forking the Terra chain, his plan consists of repaying UST and LUNA holders who were unable or averse to selling their holdings amid this week’s market fall.

Validators should restart network ownership to 1 billion tokens dispersed among LUNA and UST holders, and also a community pool to fund growth prospects, as per Kwon. In particular, 40% of the newly distributed tokens would be allocated to LUNA holders who held the asset before the de-pegging event, 40% would be allocated to UST holders on a pro-rata basis at the time of the new network upgrade, 10% would be allocated to LUNA holders just before the chain ceased operations, and 10% would go toward the advancement pool.

Kwon believes that repegging UST to the US dollar would be insignificant considering the enormous liquidity events that have happened across the Terra ecosystem this week. To put it another way, faith in the stablecoin system has been permanently destroyed. He stated:

“Even if the peg were to eventually restore after the last marginal buyers and sellers have capitulated, the holders of Luna have so severely been liquidated and diluted that we will lack the ecosystem to build back up from the ashes.”

According to data, LUNA’s market cap reached more than $41 million in early April. Terra’s UST, which is no longer considered a stablecoin, reached a high of around $19 billion. UST hit a low of roughly $0.13 on Friday following losing parity with the dollar.

Even though there is no possibility of entirely recovering the value of the blockchain, Kwon stated that the redistribution plan must repay the network’s debt holders and also “loyal community members and builders.”

Kwon’s approach came around two days after he released a plan to save the UST’s dollar peg, which included boosting the protocol’s minting capacity and extending the special drawing rights pool. As the price of LUNA and its sibling token dropped sharply, the proposal declined to gain support among so-called “LUNAtics.”

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