{"id":571027,"date":"2022-05-12T12:38:43","date_gmt":"2022-05-12T11:38:43","guid":{"rendered":"https:\/\/en.ethereumworldnews.com\/?p=571027"},"modified":"2022-05-12T12:44:10","modified_gmt":"2022-05-12T11:44:10","slug":"terra-1-3-billion-ust-burn-luna-stake","status":"publish","type":"post","link":"https:\/\/en.ethereumworldnews.com\/terra-1-3-billion-ust-burn-luna-stake\/","title":{"rendered":"Terraform Labs Plans to Burn Over $1 Billion UST As LUNA Falls Below 10 Cents"},"content":{"rendered":"\n<ul><li>LUNA creator Terraform Labs released an action plan to combat the current crisis<\/li><\/ul>\n\n\n\n<ul><li>The protocol will burn its UST holdings to reduce liabilities<\/li><\/ul>\n\n\n\n<ul><li>UST on the Ethereum network will also undergo a burn<\/li><\/ul>\n\n\n\n<ul><li>240 Million LUNA will be staked to safeguard the Terra ecosystem<\/li><\/ul>\n\n\n\n<ul><li>The plan comes a few hours after CEO Do Kwon tweeted an initial recovery strategy.<\/li><\/ul>\n\n\n\n<p>Terraform Labs has <a href=\"https:\/\/agora.terra.money\/t\/burn-the-remaining-ust-in-the-community-pool-cross-chain-liquidity-incentive-ust\/6837\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/agora.terra.money\/t\/burn-the-remaining-ust-in-the-community-pool-cross-chain-liquidity-incentive-ust\/6837\" rel=\"noreferrer noopener nofollow\">unveiled a series of steps<\/a> geared toward facilitating UST\u2019s recovery after the algorithmic stablecoin lost its peg to the US Dollar.<\/p>\n\n\n\n<p>In a Twitter thread published on Thursday (May 12, 2022), the network released three extra emergency actions as LUNA prices fell below $0.10. The plan also comes a few hours after CEO Do Kwon tweeted about proposal 1164.<\/p>\n\n\n\n<p>Kwon explained that 1164 will trigger a new base pool for the protocol allowing UST holders to swap their stablecoins for <a href=\"https:\/\/en.ethereumworldnews.com\/luna-stakers-cant-withdraw-token-crash\/\" target=\"_blank\" data-type=\"URL\" data-id=\"https:\/\/en.ethereumworldnews.com\/luna-stakers-cant-withdraw-token-crash\/\" rel=\"noreferrer noopener\">LUNA<\/a>. The process reportedly increases LUNA mint capacity by around 4x but also floods the market with more LUNA coins.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">1\/ The prevailing peg pressure on <a href=\"https:\/\/twitter.com\/search?q=%24UST&amp;src=ctag&amp;ref_src=twsrc%5Etfw\" rel=\"nofollow noopener\">$UST<\/a> from its current supply overhang is rendering severe dilution of <a href=\"https:\/\/twitter.com\/search?q=%24LUNA&amp;src=ctag&amp;ref_src=twsrc%5Etfw\" rel=\"nofollow noopener\">$LUNA<\/a>. <br><br>The primary obstacle is expelling the bad debt from UST circulation at a clip fast enough for the system to restore the health of on-chain spreads.<\/p>&mdash; Terra (UST) \ud83c\udf0d Powered by LUNA \ud83c\udf15 (@terra_money) <a href=\"https:\/\/twitter.com\/terra_money\/status\/1524654726432043008?ref_src=twsrc%5Etfw\" rel=\"nofollow noopener\">May 12, 2022<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2>Terra\u2019s Three-Step Plan<\/h2>\n\n\n\n<p>The latest action plan begins with burning some 1 Billion of Terra\u2019s UST holdings in the community pool. Also, the network will cut out cross-chain liquidity incentives by burning an additional 371 million UST currently available on Ethereum.&nbsp;<\/p>\n\n\n\n<p>After the process, about 11% of os UST\u2019s liabilities should be wiped out with a total burn amount of over 1.3 billion of the stablecoin.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote\"><p>Expelling the system&#8217;s bad debt with the above items should help restore the on-chain swap spreads to a meaningful level where the peg pressure on UST is significantly alleviated. Once the new base pool proposal passes, this will also expedite the process.<\/p><\/blockquote>\n\n\n\n<p>Finally, Terra hopes to bolster network security and mitigate any attacks on the blockchain by staking 240 million LUNA.&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">10\/ Outside of Twitter, we\u2019re active with our moderators on Discord and Telegram, where you can get assistance with many of the moving parts due to the past day\u2019s events. <br><br>More to come. Please bear with us.<\/p>&mdash; Terra (UST) \ud83c\udf0d Powered by LUNA \ud83c\udf15 (@terra_money) <a href=\"https:\/\/twitter.com\/terra_money\/status\/1524654741577662464?ref_src=twsrc%5Etfw\" rel=\"nofollow noopener\">May 12, 2022<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>As of press time, both LUNA and UST prices remain down. Although the stablecoin has recovered 14% in the last 24 hours, UST is still about 60 cents off from its $1 peg.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img width=\"851\" height=\"518\" src=\"https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/LUNAUSDT_2022-05-12_12-37-02.png\" alt=\"\" class=\"wp-image-571030\" srcset=\"https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/LUNAUSDT_2022-05-12_12-37-02.png 851w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/LUNAUSDT_2022-05-12_12-37-02-300x183.png 300w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/LUNAUSDT_2022-05-12_12-37-02-770x469.png 770w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/LUNAUSDT_2022-05-12_12-37-02-269x164.png 269w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/LUNAUSDT_2022-05-12_12-37-02-746x454.png 746w\" sizes=\"(max-width: 851px) 100vw, 851px\" title=\"\"><figcaption>LUNA Daily Chart (Source: TradingView)<\/figcaption><\/figure>\n\n\n\n<figure class=\"wp-block-image size-full\"><img width=\"851\" height=\"518\" src=\"https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/USTUSDT_2022-05-12_12-38-01.png\" alt=\"\" class=\"wp-image-571031\" srcset=\"https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/USTUSDT_2022-05-12_12-38-01.png 851w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/USTUSDT_2022-05-12_12-38-01-300x183.png 300w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/USTUSDT_2022-05-12_12-38-01-770x469.png 770w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/USTUSDT_2022-05-12_12-38-01-269x164.png 269w, https:\/\/en.ethereumworldnews.com\/wp-content\/uploads\/2022\/05\/USTUSDT_2022-05-12_12-38-01-746x454.png 746w\" sizes=\"(max-width: 851px) 100vw, 851px\" title=\"\"><figcaption>UST Daily Chart (Source: TradingView)<\/figcaption><\/figure>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Terra says it will burn its UST holdings to help LUNA and UST crashing market prices.<\/p>\n","protected":false},"author":55,"featured_media":571029,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[2,108366],"tags":[108424,108376,108364,108511],"_links":{"self":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/571027"}],"collection":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/comments?post=571027"}],"version-history":[{"count":3,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/571027\/revisions"}],"predecessor-version":[{"id":571036,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/posts\/571027\/revisions\/571036"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/media\/571029"}],"wp:attachment":[{"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/media?parent=571027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/categories?post=571027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/en.ethereumworldnews.com\/wp-json\/wp\/v2\/tags?post=571027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}