Terra Proposes To Burn The Remaining UST
On May 12, a revised proposal was submitted with additional points added to Do Kwon’s first UST rescue plan. Terraform Labs is led by Do Kwon.
The proposal, dubbed “Agora” and started on Terra Station with the number 1164
Focuses on tweaking the mint and burn settings of UST, Terra’s controversial decentralized algo stablecoin.
The voting is presently ongoing, with 452.31 million votes cast (out of 515.46 million) in favor, 36.82 percent abstentions, and 0.57 percent of votes cast being mixed “no” and “no with veto.”
The proposed strategy calls for increasing the BasePool from 50 million to 100 million SDR and reducing PoolRecoveryBlock from 36 to 18 blocks.
Minting capacity should increase from $293 million to around $1,200 million as a result of these changes. According to the proposal’s author, the consequence will serve to accelerate UST outflows from the system, lowering swap spreads and putting pressure on the UST peg, but at the expense of the LUNA token.
This amounts to 371.29 million UST, with the entire amount consumed totaling 1,388,233,195—roughly 11% of the outstanding UST liabilities. TFL feels that adjusting the pools will save the UST in the end.
“Purge the wounds”
The future of the Terra community is currently unknown. The LUNA price has plunged about 100% today, trading at $0.1, and UST is currently trading at $0.34, with a 64% discount to primary stablecoins.
Terraform Labs, on the other hand, advises its followers that once the application for changes is approved, the recovery would be accelerated.
They also referred to the current scenario as a war room, assuring readers that “lunatics” have been working 24/7 for the past four days to help injured users and “stop the bleeding.”
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