There’s been several community and validator groups discussing launching a fork of the Terra chain to make the ecosystem whole from the UST depegging event. Wanted to offer my perspective on how this should be done.
As of this time, there are still several billion dollars worth of UST, and the value of Luna token has fallen to essentially zero. Even if the peg were to eventually restore after the last marginal buyers and sellers have capitulated, the holders of Luna have so severely been liquidated and diluted that we will lack the ecosystem to build back up from the ashes. While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role.
So what remains? While UST has been the central narrative of Terra’s growth story over the last year, the Terra ecosystem and its community is what is worth preserving.
- We’ve built up one of the largest and most vibrant developer ecosystems in crypto, with some of the smartest minds in the world working on products with the best UI/UX
- Terra Station has a large install base, with million+ users across the world
- Although in distress, strong brand recognition and a name that almost everyone in the world will have heard about
- 400M (40%) to Luna holders before the depegging event (last $1 tick before the depeg on Binance should be reasonable), bLuna, LunaX and Luna held in contracts should also be recipients, minus the Terraform Labs account at terra1dp0taj85ruc299rkdvzp4z5pfg6z6swaed74e6. The new chain should be community owned. Preserving decent ownership of the network in its strongest believers and builders is important.
- 400M (40%) to UST holders pro-rata at the time of the new network upgrade. UST holders need to be made whole as much as possible
- 100M (10%) to Luna holders at the final moment of the chain halt – last minute marginal luna buyers should be compensated for their role in attempting to provide stability for the network
- 100M (10%) to the Community Pool to fund future development.
- All Luna besides the third tranche should be staked at the network genesis state.
- The network should incentivize its security with a reasonable inflation rate, say 7%, as fees will no longer be enough to pay for security without the swap fees.
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