- Terraform Labs CEO Do Kwon has set out his plan for restoring UST’s peg to the dollar.
- Key to the plan is increasing the minting capacity.
Terraform Labs CEO Do Kwon has set out his plan of action to help the stablecoin TerraUSD (UST) return to its dollar peg.
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In a tweet thread on Wednesday, he acknowledged that the last 72 hours have been extremely tough for the Terra community and that he hopes he can help it to survive.
Kwon recognized that the amount of capital trying to exit UST has resulted in a lot of selling of Luna, due to how the stablecoin mechanics work. This has resulted in a large price drop for Luna, which is down 85% today.
“Before anything else, 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,” he said on Twitter.
To begin with, he is endorsing a community proposal that will increase the amount of Luna being minted per day. This would enable more UST holders to cash out.
“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,” he said.
Going forward, he said the stablecoin will be redesigned to be collateralized.
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