Cryptocurrency investors were left to reckon with a market death spiral earlier this week, as Terra Luna suddenly collapsed on May 12. Billions disappeared in a flash on Thursday and left individuals who spent their life savings on the once top-performing coin in trouble. They’ve turned to LUNA’s founder for support, and he has outlined the corporate’s next steps.
What is going to Terra Luna do next?
LUNA saw its value rapidly collapse on Thursday, falling from $17.52 per token on May 10 to $0.00009228 within the evening of May 13.
Terra Luna has scrambled for an answer, with its Stablecoin-based blockchain also taking a success.
The blockchain stuttered today and halted service within the morning before resuming again around 1pm.
READ MORE: Crypto CRASH: Bitcoin heading for record losing streak after collapse
Do Kwon, Terra Luna’s founder, has outlined what his company has planned following an “extremely tough” 72 hours.
In a Twitter thread on May 11, he assured his followers that he was “resolved to work with each one” of them to “weather the crisis” and “construct our way out of this”.
He proposed “several remedial measures” designed to assist the coin regain ground in the marketplace.
At the identical time, nonetheless, he warned that among the solutions could include a “high cost” for UST and LUNA holders.
Mr Kwon wrote: “First, we recommend the community proposal 1164 to Increase basepool from 50M to 100M SDR *) Decrease PoolRecoveryBlock from 36 to 18. This may increase minting capability from $293M to ~$1200M.
“This could allow the system to soak up the UST more quickly.”
He added: “With the present on-chain spread, peg pressure, and UST burn rate, the provision overhang of UST (i.e., bad debt) should proceed to diminish until parity is reached and spreads begin healing.
“Naturally, that is at a high cost to UST and LUNA holders, but we are going to proceed to explore various options to usher in more exogenous capital to the ecosystem & reduce supply overhang on UST.”
“As we start to rebuild UST, we are going to adjust its mechanism to be collateralised.”
Mr Kwon concluded Terra’s “ecosystem” was “probably the most vibrant within the crypto industry”, and added the dedicated work behind it could see investors “come out of this together”.
He explained he and his teams were focused on the long-term, and a “setback” wouldn’t deter their work.
He said: “Terra’s focus has all the time oriented itself around a long-term time horizon, and one other setback this May, just like last yr, is not going to deter the #LUNAtics.”
“Short-term stumbles don’t define what you possibly can accomplish.”
Terra Luna has also said it could post a “post-mortem” on “the whole lot that transpired the past week.
The document could be “published asap”, the corporate said in a post on Twitter earlier this evening.
Representatives called for people to “be secure” as they cope with the “tremendously difficult times”.
The data in this text doesn’t equate to financial advice. Anyone considering investing in cryptocurrency should understand the risks involved.
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