צי קוואָן ריווילז די פארגעלייגט רעסקיו פּלאַן פון Terra צו ראַטעווען LUNA און UST

The outspoken Terraform Labs founder Do Kwon finally broke his silence and detailed the new rescue plan he has to re-peg the ecosystem’s flagship stablecoin, UST.

אין די לעצטע טוויטטער פאָדעם, Kwon said that the only path forward is to absorb the stablecoin supply that intends to exit before UST can start to re-peg.

• The exec added that there is no other way out after accepting the community proposal. He further explained,

"די פּרייַז סטייבאַלאַזיישאַן מעקאַניזאַם איז אַבזאָרבינג UST צושטעלן (איבער 10% פון די גאַנץ צושטעלן), אָבער די פּרייַז פון אַבזאָרבינג אַזוי פיל סטאַבילקאָינס אין דער זעלביקער צייט האט אויסגעשטרעקט די אויף-קייט ויסבייַטן פאַרשפּרייטן צו 40%, און די לונאַ פּרייַז האט דיקריסט דראַמאַטיקלי אַבזאָרבינג. די ארבס״.

• The main idea is to focus on the arbitrage opportunity.
• די פאָרשלאָג stated that allowing more efficient UST to burn and LUNA mint will put pressure on the latter’s price in the short term. But this mechanism will be an effective way to bring UST back from deviating to its intended peg and will eventually stabilize LUNA’s price.
• The burning of billions of UST will trigger a significant dilution of LUNA. It further added,

“Nevertheless, there is no limit in LUNA supply, this market mechanism will actually work to bring stable UST and stable LUNA price (although likely at a lower price point for LUNA).”

• The devs will essentially increase the base pool from 50 million to 100 million special drawing rights (SDR) and decrease PoolRecoveryBlock from 36 to 18. This, in turn, will ramp up minting capacity from $293 million to nearly $1.2 billion, thereby minting 4x of the stablecoin than usual.
• As the team starts to rebuild UST,  Kwon said that the team will adjust its mechanism to be collateralized, meaning UST will be backed by other financial assets, including traditional and cryptocurrencies.
• Despite publishing this proposal several hours ago, it has failed to bring any trust back. LUNA פּלאַמאַטיד below $1 earlier today, losing around 99% of its value in less than a week.