Experts from the crypto space have not shied away from putting forward their opinions with respect to the whole LUNA-UST episode. Binance’s Changpeng Zhao, for instance, has been quite vocal about how things have haphazardly unfolded in the Terra ecosystem.
Apart from opining on the incident, people have also started proposing how the state of affairs in the Terra ecosystem can be improved. A particular proposal on the Terra forum advocates that Terra should make investors “whole” again with its remaining funds.
Ethereum founder’s twist to the proposal
Vitalik Buterin consented with a particular “crypto skeptic” who insisted that Terra ought to prioritize helping smaller wallets or people who had “a couple thousand or more of UST deposited in Anchor than “rich whales.”
Per the user PersianCapital,
“If Terra just focussed on the ‘poorest’ 99.6% of wallets, then they could make this gigantic group 100% whole.”
The Ethereum founder expressed his support and asserted,
“Strongly support this. Coordinated sympathy and relief for the average UST smallholder who got told something dumb about ‘20% interest rates on the US dollar’ by an influencer, personal responsibility, and SFYL [or sorry for your loss] for the wealthy.”
Buterin went on to add that the “obvious precedent is FDIC insurance,” being “up to $250,000 per person.” The Federal Deposit Insurance Corporation, as such, is an independent federal agency that insures deposits in U.S. banks and thrifts in the event of bank failures.
The Ethereum founder went on to elucidate another “interesting” Singapore employment law where rest days, hours of work, and other conditions of service are provided only to workmen and not necessarily managers and other execs.
“Stronger regulation for low-earning employees, and a more figure-it-out-yourself approach for the wealthier. IMO things like this are good hybrid formulas.”
Perhaps, if the same logic is applied to small LUNA investors who got rekt, then it’d become explicit that Buterin wants them to be better shielded when compared to larger whales.
Skepticism lingers
The user—PersianCapital—nonetheless went on to state that the proposal might not be put into effect. Asserting why, he tweeted,
“Sadly, I’m already hearing that it might not go through, because Luna holders are voting against it.”
He further requested Buterin if he could “somehow” have a word with Do Kwon and get the proposal implemented to “relieve” people.
“I wish you could ask @stablekwon if he could somehow implement this. It would relieve a lot of people.”
Keeping the Terra ecosystem’s tokenoimics as the base, Ripple’s CTO David Schwartz commented under the same thread and outlined the harsh reality of the situation. He said,
“Luna is whole. Luna holders were supposed to share any leftover value after UST holders got $1 per UST. Luna holders owe money to UST holders that they cannot repay.”
Well, LUNA investors have undoubtedly lost massive sums of their capital as the value of the once top-10 ranked token slipped to merely a few cents. If passed, the proposal would be able to alter the fate of investors. If not, then HODLers would end up upbear the brunt of the ecosystem’s collapse without having an option.