Terraform Labs says it’s taking action to save, but LUNA’s death spiral is getting worse.
Terraform Labs has approved a plan to accelerate the UST burn rate to keep Terra from collapsing.
Terra wants to avoid collapse
Terra is still in crisis mode. The development company of Layer 1BlockchainTerraform Labs, released a new update on Thursday detailing a number of contingency measures it proposes to keep the network from total collapse.
They include a plan to accelerate the UST burn rate, which Terraform Labs CEO Do Kwon explained in a statement Wednesday. The proposal would result in UST’s daily mining capacity increasing from $293 million to $1.2 billion, meaning holders could cash out their UST for LUNA.
There’s hope that this could bring UST closer to binding, but it also means LUNA’s supply will grow faster. The proposal has garnered over 450 million LUNA votes as of press time, with just over 50% voting in favor of the move. Around 49% abstained from voting on the proposal, with the remaining minority voting against. It ends in six days.
Terraform Labs has also proposed several additional “contingency measures” to save the network. These include burning all remaining UST held in Terra’s community pool, burning an additional 371 million UST currently held on Terra, and staking 240 million LUNA tokens “to protect the network from governance attacks.” protection”.
This week Terra faced a breakdown due to its algorithmic stablecoin UST has lost its bond. While set to follow the dollar price, UST touched brief lows of $0.30 on Wednesday and is still trading below the $0.50 peg. Terra’s volatile token, LUNA, hasn’t fared much better: it’s currently trading below $0.05, down 99.9% for the week. It was worth $119 at its peak five weeks ago. The crash has been described as one of the fastest and most brutal in crypto history and had severe consequences for the rest of the market.
Several other major assets crashed today as well Ethereum by 20% and the like and both lose over 30% of their value. As investors rush to exit the market, the USDT lost its peg to the dollar, briefly hitting a low of $0.95. Nonetheless, while the market bleeds, no project faces such an uphill battle as Terra.
Source: Crypto News Deutsch