Ethereum co-founder Vitalik Buterin has tweeted his support for a proposal suggesting Terraform Labs reimburses smaller wallet holders for their losses following the recent crash.
As the dust settles on the Terra (UST) depegging disaster that shook the broader crypto industry, many investors are tallying up their losses and taking to Reddit forums to vent their emotions.
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In response to the loss of funds, an amateur investor who goes by the pseudonym @PersianCapital tweeted that Terra should reimburse victims.
To make people “whole again,” as the official Terra forum suggests, can happen in two ways, PersianCapital writes. “One way would be to return, say, 30 cents on each UST invested to every wallet. The second way is to prioritize smaller wallets. People who had a couple thousand or more of UST deposited in Anchor [TerraForm Labs’ crypto ‘bank’]. If Terra just focussed on the “poorest” 99.6% of wallets, then they could make this gigantic group 100% whole,” which will be good for community sentiment, he adds.
Buterin weighs in with support
And Vitalik Buterin agreed. “Strongly support this. Coordinated sympathy and relief for the average UST smallholder who got told something dumb about ‘20% interest rates on the U.S. dollar,’ by an influencer, personal responsibility and SFYL [sorry for your loss] for the wealthy,” he tweeted.
Buterin says that an example of this is Federal Deposit Insurance (FDIC) in the U.S., which pays out up to $250K of the dollar loss in every category of qualifying bank products if the bank is FDIC-insured, should a bank fail.
The FDIC was established in 1933 by President Franklin D. Roosevelt following a rush of U.S. citizens storming banks to turn deposits into paper money or gold.
Banks could not supply the required currency, causing many of them, both sound and unsound, to shut down early on March 3, 1933. At the time, Roosevelt cited “confidence of the people” as more important than currency, in harmony with @PersianCapital’s recent statements.
Buterin also calls attention to Singaporean labor law with stricter rules to protect smaller earners than wealthy earners.
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