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    Terra Founder Do Kwon Shares Plan to Bring UST Back to Its Peg

    Cryptory.net - Do Kwon, CEO Terraform Labs, broke the silence on Twitter over the past few days with a plan to save the UST stablecoin peg.

    Terra crashed 90% from its all-time highs, while the stablecoin UST is 75% below the dollar parity. Amidst market turbulence, co-founder of Terraform Labs, Do Kwon has announced a recovery plan for $UST.

    Posting on Tweet, Kwon wrote: 

    “The only path forward will be to absorb the stablecoin supply that wants to exit before $UST can start to repeg. There is no way around it. 

    We propose several remedial measures to aid the peg mechanism to absorb supply:

    First, we endorse the community proposal 1164 to Increase basepool from 50M to 100M SDR *) Decrease PoolRecoveryBlock from 36 to 18 This will increase minting capacity from $293M to ~$1200M. This should allow the system to absorb the UST more quickly.

    With the current on-chain spread, peg pressure, and UST burn rate, the supply overhang of UST (i.e., bad debt) should continue to decrease until parity is reached and spreads begin healing.

    Naturally, this is at a high cost to UST and LUNA holders, but we will continue to explore various options to bring in more exogenous capital to the ecosystem & reduce supply overhang on UST. As we begin to rebuild UST, we will adjust its mechanism to be collateralized.

    The Terra ecosystem is one of the most vibrant in the crypto industry, with hundreds of passionate teams building category defining applications within. As long as these builders, TFL among them, continue to build – we will come out of this together.

    Terra’s focus has always oriented itself around a long-term time horizon, and another setback this May, similar to last year, will not deter the #LUNAtics. Short-term stumbles do not define what you can accomplish. It’s how you respond that matters.”

    In short, in essence, the team will mint four times more UST than usual. This means additional LUNA would be minted and sold in the market to try and bring UST’s peg back to $1. “Kwontative easing” or money printing, is a new crypto term referring to the process of creating value out of thin air. 

    If UST reaches dollar parity and LUNA returns to all-time highs, it will be a solid candidate to be the most notable crypto comeback ever.

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