Quick summary:
- Tron’s Justin Sun has offered to set aside $10 million in USDD to assist the average UST investor affected by the depegging of the stablecoin
- Mr. Sun was responding to a similar idea by Ethereum’s Vitalik Buterin, calling for ‘coordinated sympathy and relief for the average UST smallholder’
- Mr. Butern also cited the existing FDIC insurance and Singapore’s employment laws as possible formulas to help smallholders of digital assets affected by events such as those surrounding UST and LUNA
The founder and CEO of Tron, Justin Sun, has offered to set aside $10 million in the new algorithmic stablecoin of USDD to assist the smallholders of UST affected by the recent crisis surrounding the Terra blockchain.
Mr. Sun’s plan is intended to assist the 236k UST holders affected most by the crisis. He also stated that he would provide additional details of the plan very soon. He said:
I sympathize with all in this unforeseen crisis. I would like to commit $10 million USDD to the recovery of the bottom 236k UST holders. I believe this will benefit the ones affected the most and show our unity! Details to be announced soon!
Ethereum’s Vitalik Buterin Had Suggested Coordinated Sympathy and Relief for the Average UST Smallholder
Justin Sun’s $10 million pledge in USDD was in response to an earlier Tweet by Ethereum’s Vitalik Buterin where he had suggested a ‘coordinated sympathy and relief for the average UST smallholder who got told something dumb about “20% interest rates on the US dollar” by an influencer, personal responsibility and SFYL for the wealthy.’
Mr. Buterin cited the existing FDIC insurance of up to $250k per affected individual and Singapore’s Employment Law that protects low-income earners as possible blueprints of how to cushion the average UST investors affected by the depegging event.
Vitalik’s suggestions on the matter were made through the following two tweets.
The obvious precedent is FDIC insurance (up to $250k per person)
An interesting unrelated one is Singapore employment law. Stronger regulation for low-earning employees, and a more figure-it-out-yourself approach for the wealthier.
IMO things like this are good hybrid formulas. pic.twitter.com/25XkfE8UVc
— vitalik.eth (@VitalikButerin) May 14, 2022
Terra and the LFG Yet to Suggest a Compensation Plan
At the time of writing, neither the team at Terra nor the Luna Foundation Guard has brought up the matter of a compensation plan for affected UST and LUNA investors.
However, forking the Terra blockchain and taking a snapshot of transactions before the depegging event is being considered by the community. But the plan has met some resistance, particularly from the CEO of Binance, who sees erasing Terra transactions, particularly on centralized exchanges, as being almost impossible.
[Feature image courtesy of @justunsuntron on Twitter]