Terra (CRYPTO: LUNA) founder Do Kwon announced plans to attempt to save his unstable stablecoin TerraUSD (CRYPTO: UST) while some are suggesting he was also behind failed stablecoin Basis Cash (CRYPTO: BAC), which is now worth under $0.005.
What Happened: After TerraUSD struggled to regain dollar parity after falling under $0.03 on Wednesday, Kwon explained in a tweet that the supply is being absorbed by burning it in exchange for $1 of Terra — but market pressure drove the spread of the mechanism to 40%, slowing it down.
Furthermore, he noted "Luna price has diminished dramatically absorbing" the minting increasing its supply and exercising selling pressure.
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Kwon said that before moving forward it is necessary to have Luna absorb all of the UST in excess to have its price reach $1 once again. To help the token reach this price, he endorsed community proposal 1164 which doubles the basepool from 50 million to 100 million and decreases the pool recovery block number from 36 blocks to 18 — which increases minting capacity and allows for the spread to lower quicker.
In the meantime, Kwon also found himself in the midst of a major controversy after a Wednesday Coindesk report identified him as one of the pseudonymous co-founders behind the failed algorithmic stablecoin Basis Cash.
Hyungsuk Kang, a former engineer at Terraform Labs, said Basis Cash was a side project from some of Terra’s early creators, including himself and Kwon.
Kang said that “Basis Cash wasn’t tested" and the team was not "even sure” it would work but Kwon “wanted to just test it out. He said this was a pilot project for doing that.”
Basis Cash was based on Basis — an algorithmic stablecoin that was announced but never launched due to a regulatory shutdown — and never managed to maintain its $1 peg.
UST Price Action: As of press time, TerraUSD is trading at $0.4354 after seeing its price falling by over 35% over the last 24 hours.
Photo: Do Kwan, Terra site video screenshot
