Crash Recovery Plan Terra project funds should give priority to holders of small amounts. This opinion was expressed by Ethereum co-founder Vitalik Buterin.
Strongly support this. Coordinated sympathy and relief for the average UST smallholder who got told something dumb regarding “20% interest rates on the US dollar” by an influencer, personal responsibility and SFYL for the wealthy. https://t.co/YfNlpvAizg
— vitalik.eth (@VitalikButerin) May 14, 2022
May 8 Algorithmic Stablecoin TerraUSD (UST) lost its peg to the US dollar. This happened once morest the backdrop of an outflow of assets from the Anchor protocol due to a decrease in the rate of return on deposits to 17.87%.
May 10 asset quotes dropped below $0.62. The fall continued on May 11following which the cryptocurrency used to issue UST LUNA collapsed to $0.3. At the time of writing, UST is trading around $0.136, while LUNA is trading at $0.0002 (CoinGecko).
Buterin supported the idea of one of the Twitter users under the nickname PersianCapital to compensate for the losses of investors. The latter noted that 1,000 Anchor wallets (out of a total of regarding 256,000) own 82% of the entire UST supply. The “poorest” of these addresses holds approximately 955,000 UST.
PersianCapital noted that the proposal to use reserve fund $1.5 billion to restore user funds. This amount is not enough to fully compensate all investors. However, focusing on the 99.6% of the “poorest” wallets would allow them to recover all their losses, PersianCapital said.
“I strongly support. Coordinated participation and assistance for medium and small UST holders, who were told nonsense regarding the “20% rate on the US dollar” by the influencer. For the rich, personal responsibility and regret for losses,” wrote the co-founder of Ethereum.
Continuing the topic, Buterin recalled that a similar approach to compensation is implemented in the insurance system. FDIC in the USA. In the event of bankruptcy of financial institutions, 100% reimbursement is guaranteed for deposits up to $250,000.
“Unrelated, but curious, is Singaporean labor law: increased protection for low-wage workers and a stricter treatment of the wealthy. In my opinion, these things are good hybrid recipes,” he added.
Recall, CEO and co-founder of Terraform Labs Do Kwon submitted a plan to resolve the situation around UST and LUNA.
Binance CEO Changpeng Zhao criticized the idea of a hard fork with the release of a new token being discussed in the Terra community.
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