Big players in the crypto industry do not seem supportive of the latest Do Kwon’s proposal of how to help the collapsed Terra (LUNA) ecosystem.
Last Friday, Terraform Labs co-founder Do Kwon put forward a ‘revival plan’ suggesting that the network hard fork and reset ownership to 1 billion tokens. A the time of writing, LUNA has a circulating supply of more than 6.5tn. In comparison, there were only 340m tokens prior to the depegging.
Binance CEO Changpeng Zhao (CZ) has slammed the proposal, arguing that “forking does not give the new fork any value. That’s wishful thinking.”
“One cannot void all transactions after an old snapshot, both on-chain and off-chain (exchanges),” the CEO added, suggesting that the idea of providing holders with a new version of LUNA based on a snapshot of their holdings before the depegging of terraUSD (UST) stablecoin won’t succeed.
Terra’s algorithmic stablecoin UST started distancing from its dollar peg on May 9 after a wave of selloff hit the market. Since LUNA sales were supposed to help UST maintain parity with the US dollar, the depegging resulted in a death spiral where LUNA inflation increased unprecedentedly and sent the price of LUNA tokens to almost zero.
Do Kwon suggested resetting network ownership to 1 billion tokens that would be distributed among LUNA and UST holders as well as a community pool to fund future development.
“The Terra community must reconstitute the chain to preserve the community and the developer ecosystem,” he said in a Friday post on Terra’s research forum.
However, Binance’s CEO said that forking would not help.
“Reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin,” he said.