A founder of the troubled Terra ecosystem has gotten a proposal approved to salvage the project in the wake of the collapse of the UST stablecoin weeks ago, Bloomberg reported Wednesday (May 26).
Do Kwon, the founder, has proposed a new structure in which the original blockchain will be called Terra Classic and the Luna token will be called Luna Classic.
The new blockchain will run a coin under the existing Luna name. It will not have anything to do with the TerraUSD stablecoin.
This will mean Terraform Labs is effectively getting rid of the TerraUSD coin. It will only be trading the Terra Classic, the report says.
This will also be designed to be a one-to-one peg with the dollar. On Wednesday (May 25) it was trading at around 10 cents.
The report notes that Kwon got a victory as the plan was approved, though there are “doubts” about whether Terra will be able to be revived.
PYMNTS wrote that Michael Hsu, the acting comptroller of the Office of the Currency (OCC), responded to the trouble with crypto and UST by saying that cryptocurrency and the surrounding economy is “dependent on hype.”
Hsu counts himself among the crypto skeptics, and he’s said similar things before.
He said crypto is “highly fragmented and prone to hacks,” with new blockchains being added daily and cross-chain bridges trying to mitigate the challenges — but being prone to the hacks.
Speaking about the UST issue, Hsu said other stablecoins had been affected first and then the rest of the crypto ecosystem.
He also said there were still issues with custody and ownership rights, which he called “underdeveloped,” with it often being unclear who exactly owns the assets. For example, he brought up Coinbase warning investors about losing their crypto if the company ever went bankrupt — a troubling sign, to him.