Do Kwon, CEO of Terraform Labs, talks about the plan to save the Terra ecosystem.
Terra Luna is down 90% from its all-time highs, while the UST Stablecoin has finally lost its peg to the U.S. dollar.
Kwon stated that they would need to absorb the supply of UST holders wishing to exit the coin.
“Only then can the UST begin to return to a benchmark rate. There is no workaround,” he stated.
Kwon suggested accelerating the pace of the LUNA release. In the Terra ecosystem, 1 UST at any time should be available for exchange for $1 in LUNA.
“Of course, UST and LUNA holders will incur significant costs, but we will continue to explore various opportunities to attract external capital to the ecosystem and reduce oversupply of USTs,” he said.
Kwon said the UST will use a collateralized mechanism in the future.
After Kwon’s proposal, the price of Luna fell from $4.10 to $2.20 and the price of UST fell from $0.50 to $0.41.