TerraForm Labs founder and CEO Do Kwon announced a plan to revive the company, receiving conflicting reactions. Many users expressed doubts about the effectiveness of the hard fork to restore the plummeting price of Terra (LUNA) and TetraUSD U.S. tokens (UST). In addition, not everyone advised burning LUNA as the most plausible way to prove a return.
Do Kwon’s recovery proposal proposes a hard fork of the existing Terra cryptocurrency without the participation of stabelcoin algorithms, and a redistribution of new LUNA tokens to investors based on a historical snapshot before the start of the stabelcoin downward spiral.
According to some members of the cryptocurrency community, Binance CEO Changpeng Zhao believes that burning is the best solution.
What is Zhao’s opinion;
According to experts, supply reduction should be done by burning the coin. You have to dump all those people who were trying to save the money.
TerraForm advocate Do Kwon has changed his position, and on Saturday, May 21, he publicly shared the address for burning LUNA tokens. In his opinion, it will not benefit people when using this address in his own words.
Luna, price chart.
LUNA is priced at $0.00016. Source: Tradingview’s LUNA/USD price chart
Kwon said on Twitter today that burning the LUNA token is a bad idea. He was able to explain his reasons for being concerned 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.
He also stressed that the burning address is informational only and warned against using it
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 discovery caused even more confusion among investors. However, LUNA’s low volatility presents investors with lucrative opportunities. Many are trying to recoup their losses and find a profitable trade in the future.
Terra is no longer minting a new LUNA.
Kwon previously stated that Terra is no longer minting new LUNA. Therefore, investors believe that the combustion mechanism will improve the price of LUNA out of scarcity.
Because of the uncertainty of the resolution plan, investors are advised to refrain from making quick financial decisions as Terra’s recovery master plan is under intense public scrutiny.
The direct cause of Terra’s collapse has been that many projects have tried to move into different blockchain ecosystems, struggling to survive. Not long ago, the Near Foundation took over Tracer, a Web3 fitness and lifestyle app.
Near Foundation’s Chalabi emphasized that projects called Tracer are like the fundamental values of the ecosystem and said that:
First and foremost, a project should look out for the interests of its community and users. That’s the most valuable thing you have right now.
The man advised Terra projects to migrate only after considering the interests of their users and communities, and said, “That can actually determine your success.”