After two days of silence, the Terra founder has issued a new governance proposal to keep the community alive and compensate token holders.
Terraform Labs co-founder Do Kwon has tabled a proposal to preserve the Terra ecosystem following the historic de-pegging of its algorithmic stablecoin, UST, and the resulting death spiral that plunged LUNA tokens to practically zero.
In a Friday post on Terra’s research forum, Kwon said, “The Terra community must reconstitute the chain to preserve the community and the developer ecosystem.” His proposal, which was in response to validator groups discussing the possibility of forking the Terra chain, involves compensating UST and LUNA holders who were unable to sell their holdings during this week’s price collapse.
Kwon proposed that validators should reset network ownership to 1 billion tokens distributed among LUNA and UST holders, as well as a community pool to fund future development. Specifically, 40% of the newly distributed tokens would go toward LUNA holders before the de-pegging event; 40% would go towards UST holders on a pro-rata basis at the time of the new network upgrade; 10% would be allocated to LUNA holders just before the chain halted operations and the remaining 10% would go toward the development pool.
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