Cryptocurrency investors were left to reckon with a market death spiral earlier this week, as Terra Luna suddenly collapsed on May 12. Billions disappeared in a flash on Thursday and left people who spent their life savings on the once top-performing coin in trouble. They have turned to LUNA’s founder for support, and he has outlined the company’s next steps.
What will Terra Luna do next?
LUNA saw its value rapidly collapse on Thursday, falling from $17.52 per token on May 10 to $0.00009228 in the evening of May 13.
Terra Luna has scrambled for a solution, with its Stablecoin-based blockchain also taking a hit.
The blockchain stuttered today and halted service in the morning before resuming again around 1pm.
Do Kwon, Terra Luna’s founder, has outlined what his company has planned following an “extremely tough” 72 hours.
In a Twitter thread on May 11, he assured his followers that he was “resolved to work with every one” of them to “weather the crisis” and “build our way out of this”.
He proposed “several remedial measures” designed to help the coin regain ground on the market.
At the same time, however, he warned that some of the solutions could come with a “high cost” for UST and LUNA holders.
Mr Kwon wrote: “First, we endorse the community proposal 1164 to Increase basepool from 50M to 100M SDR *) Decrease PoolRecoveryBlock from 36 to 18. This will increase minting capacity from $293M to ~$1200M.
“This should allow the system to absorb the UST more quickly.”
He added: “With the current on-chain spread, peg pressure, and UST burn rate, the supply overhang of UST (i.e., bad debt) should continue to decrease until parity is reached and spreads begin healing.
“Naturally, this is at a high cost to UST and LUNA holders, but we will continue to explore various options to bring in more exogenous capital to the ecosystem & reduce supply overhang on UST.”
“As we begin to rebuild UST, we will adjust its mechanism to be collateralised.”
Mr Kwon concluded Terra’s “ecosystem” was “one of the most vibrant in the crypto industry”, and added the dedicated work behind it would see investors “come out of this together”.
He explained he and his teams were focused on the long-term, and a “setback” would not deter their work.
He said: “Terra’s focus has always oriented itself around a long-term time horizon, and another setback this May, similar to last year, will not deter the #LUNAtics.”
“Short-term stumbles do not define what you can accomplish.”
Terra Luna has also said it would post a “post-mortem” on “everything that transpired the past week.
The document would be “published asap”, the company said in a post on Twitter earlier this evening.
Representatives called for people to “be safe” as they deal with the “tremendously difficult times”.
The information in this article does not equate to financial advice. Anyone considering investing in cryptocurrency should understand the risks involved.
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Published at Fri, 13 May 2022 23:25:12 +0000