Do Kwon: ‘I Am Heartbroken’ Over Pain Caused by UST Collapse

The admission comes after the stunning demise of the Terra blockchain’s flagship project.

May 13, 2022 at 10:32 p.m. UTC
Updated May 16, 2022 at 4:17 p.m. UTC

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Terra creator Do Kwon said in a tweet thread he was “heartbroken” about his creations losing functionally all of their value this week.

Kwon, who founded Terraform Labs – creator of the luna (LUNA) governance token, terraUSD (UST) stablecoin and various other cryptocurrencies – said he spent the last several days calling various community members about the tokens’ losing all of their value. Luna, which was worth nearly $120 at the start of April, collapsed in dramatic fashion this week and traded around at less than 1 cent as of press time.

“I still believe that decentralized economies deserve decentralized money – but it is clear that $UST in its current form will not be that money,” he tweeted.

UST, a stablecoin whose value was supposed to remain pegged to the U.S. dollar, lost that peg earlier this week and never recovered.

Kwon pointed to his “revival” plan on Terra’s Agora governance forum for next steps. Posted earlier Friday, the plan envisions distributing ownership in the network across UST and LUNA holders; it acknowledges Terra’s stablecoin as it stands is irrecoverable.

“While a decentralized economy does need decentralized money, UST has lost too much trust with its users to play the role,” Kwon said there. The blockchain underpinning LUNA and UST was shut down twice by validators over the past day.

Kwon said that he did not sell any of his LUNA or UST during the “incident.”

The situation was exacerbated earlier this week when Terraform Labs and the Luna Foundation Guard, an entity tasked with maintaining the value of UST, appear to have hyperinflated LUNA by printing several billion tokens and dramatically increasing the number of tokens in circulation, further speeding LUNA’s price collapse in a bid to save UST.

The token’s market capitalization fell from $28 billion at the start of May to just around $600 million at press time.


Read more about
The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

Trending

1
CoinDesk - Unknown
How the US Can Establish Itself as a Crypto Leader

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

Regulators have an opportunity to map out thoughtful, strategic policy on stablecoins and beyond.

CoinDesk - Unknown
2
CoinDesk - Unknown
No, the UK Is Not Going to Make USDC and USDT Legal Tender

For “legalize” read “regulate.”

For “legalize” read “regulate.”

CoinDesk - Unknown
3
CoinDesk - Unknown
Thoughts From Davos

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

The crypto industry showed up in force at the World Economic Forum’s annual meeting.

CoinDesk - Unknown
4
CoinDesk - Unknown
Bitso, primer unicornio cripto de América Latina, despide a 80 empleados

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

El exchange, que tenía más de 700 empleados antes de los recortes, cuenta con cuatro millones de usuarios en la región.

CoinDesk - Unknown