Do Kwon, CEO of Terraform Labs, has laid out his strategy for helping the stablecoin TerraUSD (UST) reclaim its dollar peg.
He stated in a tweet thread on Wednesday that the Terra community has had a difficult 72 hours and that he hopes he can help it survive.
Due to the way the stablecoin mechanics function, Kwon realized that the amount of capital trying to depart UST has led in a lot of selling of Luna. This has resulted in a significant price decline for Luna, which is currently down 85 percent.
“Before anything else, the only path forward will be to absorb the stablecoin supply that wants to exit before UST can start to repeg. There is no way around it,”
So, he says on Twitter.
To begin with, he is approving a community initiative to boost the daily quantity of Luna coined. More UST holders would be able to pay out as a result.
“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,”
So, he says
He stated that the stablecoin will be rebuilt in the future to be collateralized.
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