Ethereum founder Vitalik Buterin said on Sunday that all attempts by Terra to repay its holders should be directed towards the most vulnerable holders.
In a tweetButerin called on Terra’s developers to shift their recovery efforts to UST holders who were not whales, but rather smaller private investors.
The ETH founder’s comments were in response to a Twitter user’s thread @PersianCapitalwhich revealed that most of UST’s offering on the Anchor Protocol, which was ground zero before the stablecoin crash, was concentrated on whale keepers.
Terra recovery could largely point to whales
@PersianCapital refers to a Terra governance proposal that advocates using the blockchain’s $1.5 billion Bitcoin reserves to return some value to UST holders. The proposal, made last week, appears to have had significant involvement from the Terra community.
But such a plan would mean whales, which make up about 82% of all UST keepers, would get a much larger share than smaller, more vulnerable keepers.
The Twitter user suggested that the $1.5 billion more could instead be put to pay back smaller wallets — the poorest 99.6% of all UST holders by value. This could potentially return every dollar invested to traders who more likely needed it.
Buterin echoed this sentiment, stating that vulnerable Terra holders deserved a rescue package more than their wealthy counterparts.
Coordinated sympathy and relief for the average small UST farmer who was told something stupid about “20% interest rates on the US dollar” by an influencer, personal responsibility and (sorry for your loss) for the rich.
But where is the recovery?
But even amid multiple recovery proposals, UST’s peg has steadily deteriorated and is now below $0.20. Terra spent a record amount of LUNA and also burned excess UST to support the pen. Nothing seems to work.
Terra founder Do Kwon had said last week that the project would now use its $1.5 billion in reserves to protect the developers of the blockchain.
But Kwon has so far provided little information on the case. This has also raised a whole host of questions about where exactly Terra’s Bitcoin reserves are located.
With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can watch him play video games or watch Seinfeld reruns. You can reach him at [email protected]
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