Do Kwon, CEO of Terraform Labs, will not admit defeat. after 18 hours Wait in which his Terra (LUNA) and TerraUSD (UST) coins suffered a harrowing free fall, Do Kwon has announced his “rescue plan” for the Terra community.

Terra is down 90% from its all-time highs, while UST “stablecoin” is 75% below dollar parity. But fear not, the arrogant Kwon has planned “several corrective measures” to rescue the billions wiped from Terraform Labs’ total market capitalization.

In a nutshell, the “decentralized” stablecoin protocol UST has found a preliminary solution to its disastrous situation where its peg to the US dollar was broken. The process should bolster the UST burn, which has so far been ineffective in achieving dollar parity for the stablecoin.

TerraUST wallows at less than $0.50. Source: TradingView

In the previous Tweet thread, Kwon suggested that his team would increase the base pool from 50 million to 100 million SDRs and reduce the PoolRecoveryBlock from 36 to 18. This will increase minting capacity from $293 million to around $1.2 billion.

In essence, the team will mint four times more UST than usual. The process of creating value out of thin air has already coined a new crypto term, “Kwontative Easing”, or money printing.

It is not clear why Kwon wrote “$1.2 billion” instead of $1.2 billion; some Twitter commenters assume it’s to lessen the blow and mitigate the scale of the problem.

Adil Abdulali, Head of Portfolio Management at Securitize Capital, told Cointelegraph that “UST is an ‘algorithmic’ stablecoin and is not backed by cash reserves.” In a word of warning, he said:

“Unlike other stablecoins like USDC and Tether, UST is an ‘algorithmic’ stablecoin and is not backed by cash reserves. Comparatively, Circle guarantees USDC stability with each USDCoin backed by one US dollar, highlighting the importance of choosing the right stablecoin.”

Related: Coinbase CEO “has never been more bullish” even after $430 million loss in Q1

Despite the Sisyphean task ahead for the Terra team, Do Kwon continues to rally the lunatics and “make some noise” in support of the Terraform ecosystem:

If UST reaches dollar parity and Luna returns to all-time highs, it will be a strong candidate to be the most notable crypto comeback of all time.





This post Terra founder Do Kwon shares a plan to save the UST stablecoin

was published first on https://cointelegraph.com/news/terra-founder-do-kwon-shares-plan-to-save-the-ust-stablecoin-peg

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