After last week’s drastic crypto downfall, on Sunday, May 15th, Ethereum founder, Vitalik Buterin stated that if Terra plans to repay its holders, it should be dedicated to the holders who are at the most risk.
Vitalik Buterin took to Twitter to urge Terra developers to shift their recovery efforts to UST holders, those who are not whales, but small retail investors.
Buterin’s reaction was in response to a user known as @PersianCapital’s Twitter thread which was based on Anchor Protocol’s UST supply that had crashed below its dollar peg. The Twitter user’s main highlight was on whale holders.
The @PersianCapital Twitter feed was focused on Terra’s proposal that plans to raise funds using Terra blockchain’s $1.5 billion bitcoin stash so they can return the loss to certain holders. This proposal which was purchased last week has garnered a huge response from the Terra community.
However, if this plan is executed, then Whales would be the main receivers which account for approximately 82% of all UST holders, giving a larger share to Whales than the vulnerable holders.
Consequently, the Twitter user was seen claiming that instead of allocating $1.5 billion to whales, it could be offered to smaller wallets which make up 99.6% of all holders. of UST in value. This could eventually bring in every dollar invested by the most needy investors.
Meanwhile, Vitalik Buterin stressed that the vulnerable investors deserve a bailout more than the wealthy share.
What is the recovery plan?
Although several recovery proposals have been made, the Terra stablecoin and the UST peg have now declined to $0.16. In order to stop this unpecking, the blockchain issued a lump sum amount of LUNA as well as burning excess UST, but nothing seems to work.
Do Kwon, Terra founder, had last week made an announcement that the project is planning to raise $1.5 billion in reserves to protect its developers. However, the founder, Kwon hasn’t given many details which have raised the question of where exactly is Terra Bitcoin’s reserves.
