Ethereum cofounder Vitalik Buterin called for Terra holders to be compensated after the coin crashed “Coordinated sympathy and relief for the average UST smallholder who got told something dumb about ‘20% interest rates on the US dollar’ by an influencer…” Buterin tweeted. Stablecoin TerraUSD and sister token Luna crashed last week. Loading Something is loading.
Ethereum cofounder Vitalik Buterin thinks holders of stablecoin Terra and its sister token Luna should be compensated following their spectacular crash last week that sparked a broad selloff in the wider cryptocurrency market.
The blow-up kicked off as algorithmic stablecoin TerraUSD de-pegged from the dollar early in the week, beginning a “death spiral”, as one analyst put it, in the value of the coin and its related token Luna.
As the stablecoin community emerges from the collapse, Buterin endorsed one Twitter user’s suggestion: “If Terra just focussed on the ‘poorest’ 99.6% of wallets, then they could just make this gigantic group 100% whole.”
Buterin quoted the tweet Saturday, saying he “strongly” supported it.
“Coordinated sympathy and relief for the average UST smallholder who got told something dumb about ‘20% interest rates on the US dollar’ by an influencer, personal responsibility and SFYL [sorry for your loss] for the wealthy,” Buterin tweeted.
The founder of the second-largest cryptocurrency alluded to government intervention, saying FDIC insurance is an “obvious precedent” in reimbursing people who have lost money, citing coverage of $250,000 per person. He also referenced a separate Singaporean rule.
“An interesting unrelated [precedent] is Singapore employment law,” he wrote in a tweet. “Stronger regulation for low-earning employees, and a more figure-it-out-yourself approach for the wealthier.”
He stopped short of calling specifically for more regulation of the sector.
Meanwhile, the founder of Terraform Labs Do Kwon, has attempted to reverse the fortunes of holders of TerraUSD, which was the world’s third-biggest stablecoin before it lost its peg to the dollar.
In a Twitter thread on Monday, he said he had been in discussions for next steps for the Terra community. He proposed a revival plan that would entail “forking” the TerraUSD blockchain into a new chain with a new Terra coin that is not pegged to the dollar. TerraUSD would live on as Terra Classic.
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