Terra supporters vote to revive the cryptocurrency Luna, abandon UST

The UST stablecoin fell below the expected value of $ 1 in May, causing panic in the cryptocurrency market.

Gabby Jones | Bloomberg | Getty Images

Terra backers have approved a plan to revive the failed cryptocurrency venture, without the controversial stablecoin that helped trigger its staggering demise two weeks ago.

“With overwhelming support, the Earth ecosystem has voted to pass Proposition 1623, calling for the genesis of a new blockchain and the preservation of our community,” Terra’s official Twitter account published Wednesday.

The proposal would lead to the creation of a new blockchain, a shared ledger of transactions, and its associates moon token, which is now useless after investors fled en masse in the cryptocurrency equivalent of a run to the bank.

Earlier this month, landUSDa so-called stablecoin, plunged below the expected peg of $ 1. This led to panic in the cryptocurrency market, with investors downloading its twin token, luna.

TerraUSD, or UST, is what is known as an “algorithmic” stablecoin. Through complex engineering, it was designed to maintain its dollar value through the creation and destruction of the UST and the moon, which, in theory, would help balance supply and demand.

It differs from the number of major stablecoins, such as bind Other USDCthey are intended to operate, as in an actual fiat currency held in a reserve to support the dollar peg in case clients withdraw their funds.

At their peak, the moon and UST had a combined market value of nearly $ 60 billion.

Skeptics abound