Do Kwon’s co-founder and CEO of TerraForm Labs recently announced the Terra revival plan and received mixed reactions; many of them have questioned the effectiveness of a hard fork in reviving the fallen price of Terra (LUNA) and TerraUSD (UST) tokens. On the other hand, few recommended burning LUNA as the most plausible way for a compelling comeback.
The revival proposal of Do Kwon involves hard forking of the existing Terra Blockchain without the involvement of algorithmic stablecoin and redistributing the new version of the LUNA tokens to investors based on a historical snapshot before the downward spiral of the stablecoin.
Some crypto community members, including the CEO of Binance, Changpeng Zhao, believe that a burn is the best solution.
Reducing supply should be done via burn, not fork at an old date, and abandon everyone who tried to rescue the coin.
TerraForm’s founder, Do Kwon, changed his mind and on Saturday, May 21 publicly shared a burn address for LUNA tokens with a warning that people who use the address have nothing to gain, in his own opinion.
Kwon recently said on Twitter that burning LUNA tokens is not a good idea. He tried to justify his concerns about burning LUNA.
To clarify, as I’ve noted multiple times i dont think sending tokens to this address to burn tokens is a good idea – nothing happens except that you lose your tokens.
Moreover, he also clarified that the burn address shared is just for informational purposes and warned against its use:
Happy to provide for information purposes but want to clarify that you should not burn tokens unless you know what you are doing – I for one cannot understand.
This revelation resulted in more confusion among investors. However, LUNA’s insane volatility provides a lucrative opportunity for investors as many try to recoup their losses and others eye profitable trades.
Terra Is No Longer Minting New LUNA
Do Kwon has earlier confirmed that Terra is no longer minting new LUNA. That’s why investors believe a burning mechanism will improve LUNA’s price owing to scarcity.
Among an unclear roadmap to a resolution, investors are advised to refrain from making sharp financial decisions as the master plan for Terra’s revival remains under public scrutiny.
As a direct consequence of the Terra collapse, multiple projects sought to migrate to different blockchain ecosystems fighting for survival. For example, Near Foundation has also played its part by recently onboarding Tracer, a Web3 fitness and lifestyle app.
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Nicky Chalabi from the Near Foundation highlighted that projects like Tracer seek to align with the fundamental values of the ecosystem and said that:
Projects must watch the interests of their community and users because, in the end, that’s the most valuable thing you have.
He advised Terra projects to migrate only after considering the interests of their users and communities and stated, “That can actually define your success.”
Featured image from Flickr, and chart from Tradingview.com