NEW YORK (BLOOMBERG) - Terraform Labs, which is incorporated in Singapore, is working on ways to keep its Terra blockchain and ecosystem going despite the collapse of its cryptocurrency stablecoin, according to a blog post attributed to co-founder Do Kwon.
The proposal includes the redistribution of ownership of the blockchain network to investors, who saw the value of their TerraUSD (UST) stablecoin and Luna tokens get wiped out last week. The proposition, titled Terra Ecosystem Revival Plan, would distribute one billion new Luna tokens to UST and Luna holders.
Mr Kwon did not respond to requests for comment made over Twitter and Telegram.
Whether the proposal would save the blockchain remains in question. The network had relied heavily on investors' confidence to make its algorithmic stablecoin work before its meltdown last week.
If passed, the proposal also raises other questions, such as how centralised exchanges that allow trading of Luna and UST would be able to distribute the new tokens to their users.
UST - a token that primarily uses algorithms rather than collateral to adjust its supply and maintain a one-to-one peg with the United States dollar - and sister coin Luna have lost almost all their value, while activity on the underlying Terra blockchain was twice suspended.
A month after reaching a record of US$119, the price of Luna, once the fourth-largest cryptocurrency in the world, collapsed to virtually zero and has been pulled from major exchanges like Binance. UST, meanwhile, was trading below 10 US cents on Monday.
Their collapse spread to other digital coins, knocking some US$300 billion (S$418 billion) off crypto's trillion-dollar total market value. Most significantly, it caused wobbles in even the largest collateralised stablecoins like Tether and USDC, which back their peg with actual assets, though they returned to business as usual by the end of last week.
Mr Kwon's wife, meanwhile, reportedly sought emergency protection after an unidentified man "trespassed" into their apartment building in South Korea, police in Seoul's Seongdong-gu district told digital media platform Forkast. She has subsequently been provided with security, the report on Friday (May 13) added.
Crypto News reported that the man was an investor who lost roughly US$1.56 million in Luna's collapse, a claim that could not be independently verified.
According to a report in Chosun Ilbo newspaper, the man rang the doorbell of Mr Kwon's apartment on Thursday night, and Mr Kwon's wife answered the door. The man reportedly asked something like "Is your husband home?", and then proceeded to run off after she said he was not.