There have been mixed reactions after Do Kwon, the co-founder and CEO of Terraform Labs announced his proposed revival plans for the Terra ecosystem. While many questioned the usefulness of a hard fork in restoring the fallen price of Terra, especially knowing that new investors post-crash would be burnt and confidence in the project eroded, others suggested that the best way to go about it is to burn excess coins created.
Kwon’s proposal to save the Terra ecosystem requires hard forking the existing Terra blockchain and releasing a fresh version of the LUNA tokens to investors based on a historical snapshot before the death spiral.
The community and one of the most prominent figures in the cryptocurrency space, Changpeng “CZ” Zhao, the Chief Executive Officer of Binance, kicked against Kwon’s proposal and insisted that way forward is to first burn extra luna coins using available Bitcoin and other coins reserve claimed by Do Kwon himself.
In response, Kwon claimed most of the reserve was used to defend against the decline at intervals. He eventually released a breakdown of how that was done as reported by Investors King.
However, with the Luna community clamouring for the burning of excess tokens, Do Kwon was forced to create a burn wallet, which the Luna community immediately assumed would function like other burn wallets. But a day after the community started sending their tokens to the burn wallet to reduce the number of luna in circulation and subsequently bolster the value of the embattled token. Kwon came out again to say sending tokens to the burn wallet he created is not going to change anything, besides people losing their tokens.
He claimed he created the wallet because he was asked to, not because it would have any meaningful impact on the Luna coin ecosystem.
He said “To clarify, as I’ve noted multiple times i don’t think sending tokens to this address to burn tokens is a good idea – nothing happens except that you lose your tokens”
“Happy to provide for information purposes but want to clarify that you should not burn tokens unless you know what you are doing – I for one cannot understand.”
This news elicited more reactions from investors, with some attempting to recoup their losses and others looking for more profitable transactions.
Investors are encouraged to avoid making hasty financial choices while the master plan for Terra restoration is still being scrutinized.