Terra creator Do Kwon proposes ditching his UST stablecoin, creating a new chain altogether

Kwon tweeted on Monday that Terra is “more than UST,” suggesting a “path forward.”

He said he hopes to create a new Terra chain without UST, keeping the Luna token as the new chain’s cryptocurrency. Luna is now trading at nearly zero, after tanking last week once UST crashed far below its $1 peg.

“The Terra chain as it currently exists should be forked into a new chain without algorithmic stablecoins called ‘Terra’ (token Luna – $LUNA), and the old chain be called ‘Terra Classic’ (token Luna Classic – $LUNC),” he wrote. “Both chains will coexist.”

If his plan passes, Terraform Labs will coordinate the creation of the new chain with validators on May 27, Kwon said. 

Then, “New $LUNA will be airdropped to $LUNC stakers, holders, residual UST holders, and essential app developers,” he added. 

“We believe this token distribution, in addition to best efforts by LFG to make $UST holders whole, best solves for the varying interests and time preferences for each stakeholder group, and most important, creates the most viable path to revive the Terra ecosystem.”

His proposal was met with criticism from Twitter.

One Twitter user prompted a reply from Kwon, after tweeting at the CEO: “Now that UST depegged, Terra is suddenly more than UST? Because just a week ago, UST in Anchor was BY FAR the most popular activity in the Terra ecosystem. I hope you understand that UST holders are waiting for you to address this.”

Kwon said to him: “All I meant is that even without UST there is an ecosystem worth preserving in Terra.”

This proposal from Kwon comes after Luna Foundation Guard dumped $2.4 billion worth of its Bitcoin reserves, along with other assets, to try and save Terra’s UST stablecoin peg. 

UST is currently trading at 10 cents, down 88% in the last week. Luna remains at a 100% loss in the same timeframe.