Terraform Labs co-founder Do Kwon announced a plan to restore the value of the dollar-linked TerraUSD (UST) algorithmic steblecoin.
The UST price began falling on May 9 and hit a low of $0.2998 on Wednesday. During the correction, the token went up to $0.8278, but the market took a bearish trend again and now the asset rate is around $0.6.
TerraUSD value dynamics
To put an end to the downward trend, Kwon proposed to increase the size of the basic pool from $50 million to $100 million and to reduce the pool recovery period from 36 to 18 hours. This would allow the network to issue nearly four times as many stabelcoins, leading to a higher UST uptake rate.
78.63% of Terra blockchain validators have already voted for the initiative. 62.76% of them supported Kwon’s proposal, 36.23% abstained and only 1.01% opposed it. As such, the innovation is likely to be put into practice.
Besides, the non-commercial organization Luna Foundation Guard (LFG) is planning to provide stability of the TerraUSD rate by means of valuable assets to be kept in reserves. For this purpose, the organization is going to raise more than $1 billion in financing.