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Do Kwon: ‘I Am Heartbroken’ Over Pain Caused by UST Collapse
The admission comes after the stunning demise of the Terra blockchain’s flagship project.
By Nikhilesh De
Updated Apr 14, 2024, 10:41 p.m. Published May 13, 2022, 10:32 p.m.
Terra creator Do Kwon said in a tweet thread he was “heartbroken” about his creations losing functionally all of their value this week.
Kwon, who founded Terraform Labs – creator of the luna (LUNA) governance token, terraUSD (UST) stablecoin and various other cryptocurrencies – said he spent the last several days calling various community members about the tokens’ losing all of their value. Luna, which was worth nearly $120 at the start of April, collapsed in dramatic fashion this week and traded around at less than 1 cent as of press time.
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“I still believe that decentralized economies deserve decentralized money – but it is clear that $UST in its current form will not be that money,” he tweeted.
UST, a stablecoin whose value was supposed to remain pegged to the U.S. dollar, lost that peg earlier this week and never recovered.
Kwon pointed to his “revival” plan on Terra’s Agora governance forum for next steps. Posted earlier Friday, the plan envisions distributing ownership in the network across UST and LUNA holders; it acknowledges Terra’s stablecoin as it stands is irrecoverable.
Read more: Do Kwon’s Proposed Terra ‘Revival’ Puts UST, LUNA Holders in Charge
“While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role,” Kwon said there. The blockchain underpinning LUNA and UST was shut down twice by validators over the past day.
Kwon said that he did not sell any of his LUNA or UST during the “incident.”
The situation was exacerbated earlier this week when Terraform Labs and the Luna Foundation Guard, an entity tasked with maintaining the value of UST, appear to have hyperinflated LUNA by printing several billion tokens and dramatically increasing the number of tokens in circulation, further speeding LUNA’s price collapse in a bid to save UST.
The token’s market capitalization fell from $28 billion at the start of May to just around $600 million at press time.
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