The founder’s hopeless attempt to rescue Luna was 9x

“Terra’s return will be the most remarkable sight,” Kwon wrote on Twitter on May 10, when Luna reached 40 USD per coin, and the value of stablecoins (price-stable cryptocurrency) UST loses its one-dollar peg. “We’re still here with everyone.”

Meanwhile, the Terraform Labs team led by Kwon continues to try to get UST back to the dollar price. According to the control mechanism blockchain of Terra, UST is the raw material to create project governance token Luna and vice versa, Luna is also needed to mint UST. The solution is: try to print more Luna than the original total supply instead of keeping the stable level of one billion coins as before.

As of May 13, more than 6.9 trillion Luna tokens have been “pumped” into the market to save UST, thousands of times more than the previous total supply. This move makes the cryptocurrency Luna free fall from more than 40 USD per coin on May 10 to 0.0001 USD on May 13, and is currently 0.00036.

The sacrifice of Luna to save UST did not work when this stablecoin sometimes dropped to $ 0.03, and until May 15, it was $ 0.2. According to experts, returning to the one-dollar mark seems to be impossible for UST.

Do Kwon, born in 1992 in South Korea. Before Luna and UST crashed, Kwon and his colleagues believe they created a better, less error-prone version of these tokens. With UST ranked fifth among the top stablecoins, Kwon had ambitions that the coin would stabilize, possibly even displacing the USD.

But despite having more than $18 billion in market capitalization, UST still collapsed. “I understand the past 72 hours have been extremely difficult for all of you,” Kwon wrote on Twitter on May 11. “I will be determined to work with everyone to get through the crisis. We will build ways to get out.”

In subsequent tweets, Kwon said he and the Terraform Labs team were rushing to restore the value of UST and urged everyone to stay calm and keep Luna and UST. He also reassured the community with the news that he voted to deploy $750 million worth of Bitcoin to professional market makers with the goal of buying and selling UST to keep its value. In addition, a storage of two billion USD worth of Bitcoins was also launched.

However, the sell-off still took place for many days, a series of investors lost everything overnight. Most exchanges also temporarily delisted.

Next plan

On May 14, Kwon continued to propose a new revival plan for Luna and UST. He admitted Terra had completely collapsed within a few days and it was very difficult to rebuild the ecosystem from the ashes. In fact, as trillions of Lunas are pumped into the market, these token holders become more numerous and diluted. Therefore, even if UST returns to the one-dollar level, it will still be very difficult for Luna to recover.

According to the new plan proposed by Kwon, there will be a new version of Luna with a total supply of one billion tokens. 400 million tokens of which will be used to reward former Luna holders, the next 400 million tokens will be distributed to UST holders and the remaining 200 million for the community group. He also assessed the community group as very necessary for the development of the new network in the future.

Do Kwon believes that at this moment, Terra needs the strong support of the community. The company is planning to reward the most loyal members – those who still believe and hold Luna, UST when something goes wrong.

Despite making new plans, Kwon admits things have been difficult. “Over the past few days, I’ve been trying to reach out to builders, communities, friends and families of individuals who have been impacted by reliance on UST. It breaks my heart when my product harms developers. you,” Kwon tweeted.

Kwon’s family was ‘terrorized’

According to MoneyToday (Korea), after Luna and UST plunged, an unidentified man came to Kwon’s house, knocked on the door, rang the bell to ask if Kwon was home. While, Forkast reported, the Seongdong-gu (Seoul) district police – where Kwon is staying – said that they are taking measures to ensure the security of family members after Kwon’s wife requested emergency protection.

On Twitter, many criticisms were also directed at the founder of Terra. Most are people who lost their investment in Luna and want their money back, others refer to the project as a multi-level ponzi scheme. Kwon is even likened to Elizabeth Holmes – the founder of the blood testing company Theranos, who was found to be a fraud and had to go to court recently.

Bao Lam