Terra's CEO Do Kwon broke his silence with a new revival plan for the ecosystem, but Vitalik Buterin and Changpeng Zhao doubt it will work.
Terra continues to deal with the fallout of its collapse as the community and its leadership scramble to save what is left of the ecosystem.
Do Kwon published a post in the Terra forum, where he outlines his vision for how Terra can continue operating. Kwon admits that the UST stablecoin has lost too much trust to exist in its current form:
"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. While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role."
Kwon proposed forking the Terra chain and resetting network ownership to one billion tokens, which should be distributed as follows:
- 40% to LUNA holders before the depegging.
- 40% to UST holders pro-rata.
- 10% to LUNA holders at the final moment before the chain got halted.
- 10% to the community pool.
Kwon closed with an appeal to continue working on Terra's vision that "a decentralized economy needs decentralized money" and that the ecosystem needs to be preserved.
Changpeng Zhao and Vitalik Buterin Critical of Terra
Do Kwon received was slammed by Crypto Twitter for the failure of LUNA and UST — especially considering his hubris during the project's good times.
Now Binance CEO Changpeng Zhao and Ethereum founder Vitalik Buterin weighed in as well.
Buterin voiced criticism of UST's promise to be an uncollateralized stablecoin without pointing out the inherent risk of such a model. He made it clear that UST had no business comparing itself to overcollateralized stablecoins like DAI.
Touching upon the revival plan for Terra, Buterin stressed that smaller holders should be prioritized:
CZ added his two cents to the revival plan and agreed with Buterin's proposal. In a tweet thread, he pointed out that Binance has never sold its LUNA stack and plans to "lead by example" in the recovery plan by putting retail users first.
In another thread, Zhao addressed the current "watershed moment" for the industry. Implicitly addressing the Terra revival plan, he said that minting and forking don't create value, as opposed to buying back and burning. However, that may be beyond the team's current financial capabilities.
CZ said that "transparency, speedy communication, and owning responsibility to the community is extremely important" after failures. This could be interpreted as a veiled dig at the communication after the collapse of LUNA. Do Kwon, who had been active on Crypto Twitter and rarely shied away from an argument, was notably reserved while UST was unraveling.
While both founders shied away from criticizing Kwon personally, the pushback on the revival plan was notable. It remains to be seen whether this will spark adjustments or even a reaction from the controversial Terra CEO.
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