Justin Sun allocates $10 million to compensate UST holders

Photo - Justin Sun allocates $10 million to compensate UST holders
The disaster of the Terra project, associated with the zeroing of the cost of the native LUNA token and the UST algorithmic stablecoin, remains one of the hottest topics in the cryptocurrency information area.
If the technical aspects that led to this outcome are becoming clearer, then discussions about dealing with the situation are only flaring up. Many people, including well-known and influential, have been affected, so the leadership of the Terra Foundation Guard, represented by Do Kwon, is forced to actively participate in finding a solution and a possible restart. One of the possible beneficiaries of the collapse of Terra could be Justin Sun of TRON DAO, who also recently announced the launch of an algorithmic stablecoin on the Tron blockchain, USDD. Tron quickly realized that they could have dozens of Terraform Labs developers who could be out of job and the thousands of LUNA community, which is considered to be one of the most active in the crypto world. In addition, Sun and his company could analyze the LUNA case to avoid the same scenario. Justin Sun is aware of such risks, saying back on May 11 that Tron is “the next target” and that the Tron DAO will send $2 billion to combat significant short funding that some exchanges have seen against their TRX token.

Sun announced that he agrees with Vitalik Buterin (Ethereum), who spoke about the need for financial compensation for “small holders.” He provides $ 10 million from his own funds, which is enough to restore the losses of 236,000 holders from the bottom of the list of token holders.

This gesture on the part of Justin Sun can be called both charitable and far-sighted. Comparing this with a state fund that allows compensating for depositors’ losses in case of a bank failure, you can confidently talk about increased loyalty from users of both Tron and Terra. What can Tron offer today? After all, the USDD algorithm is a clear reference to UST at first glance. However, according to Justin Sun, Terra’s problem lies not in algorithmic inefficiency, but in insufficient reserves for ensuring and too much debt load. Tron does have the best funding and a dynamic model of lowered interest rate of return that is inversely proportional to the number of users. Will it be enough? The speed with which the Terra fund vanished in a critical situation makes us take it very seriously. It seems that the global question of the industry today is its ability to function in the face of new risks connected with stablecoins. The marketing competitive struggle of projects may be based on this “weak point.”