Terra founder Do Kwon shares plan to rescue UST stablecoin peg

Terraform Labs CEO Do Kwon won’t throw in the towel. 18 hours later wait Among his coins Terra (Luna) and TerraUSD (UST) went through a heart-wrenching free fall, and Do Kwon announced his “rescue plan” for the Terra community.

Terra is down 90% from all-time highs, while ‘stablecoin’ UST 75% lower than dollar parity. But fear not, the arrogant Kwon has planned “several remedies” to save the billions of dollars in Terraform Labs’ total market cap.

In short, the “decentralized” stablecoin protocol UST has come up with a tentative solution to its disastrous dollar peg. This process should intensify the burn of UST, which has so far been ineffective in achieving dollar parity for stablecoins.

TerraUST is priced below $0.50. Source: TradingView

In the above tweet, Kwon suggested that his team increase the basepool from 50M to 100M SDR and reduce the PoolRecoveryBlock from 36 to 18. This will increase the minting capacity from $293 million to around $1.2 billion.

Essentially, the team will mint UST four times as much usually. The process of creating value out of thin air has created a new crypto term —“Easy Expedient”– or printing money.

It’s unclear why Kwon wrote “$1.2 billion” instead of $1.2 billion; some Twitter commentators think it’s to reduce blow and reduce the size of the problem.

Adil Abdulali, head of portfolio management at Securitize Capital, told Cointelegraph that “UST is an ‘algorithmic’ stablecoin that is not backed by cash reserves.” He warned:

“Unlike other stablecoins such as USDC and Tether, UST is an ‘algorithmic’ stablecoin that is not backed by a cash reserve. In contrast, Circle ensures the stability of USDC, with each USDCoin backed by one dollar, highlighting the right choice the importance of stablecoins.”

related: Coinbase CEO ‘Never Been So Upbeat’ Even After Losing $430M in Q1

Despite having completed the Sisyphean mission before the Terra team, Do Kwon continued to call out lunatics and “make noise” in support of the Terraform ecosystem:

If UST reaches dollar parity and Luna returns to all-time highs, it would be a credible candidate for the most dramatic cryptocurrency comeback ever.