Kwon needs to clean old shit before creating new from the post below:
I am a Luna holder and let me tell you: In no case UST holders as of May 9th should be ditched.
Emotional manipulation that they contributed to collapse of Terra is absolutely unsubstantiated. If Terra was attackable, it would be attacked. If the model is not solid, even restored peg would quickly be smashed, especially given UST deflation, as less capital would be required to shatter already fragile mechanism. Their capitulation is absolutely reasonable behavior and calling them «cowards» and «fuders» is unfair, constitutes a pressure and manipulation on the side of Terra equity holders.
I am a holder of Luna till the very end and strongly hope for project recovery. However, I do not think until UST holders are compensated, as a senior debt holders, any new project has any potential at all. The size of compensation and wallet size caps are separate topics covered by @fatman. What’s important now is that LFG, as an entity, commits to compensate UST holders, and not in the form of shares of the new project (new equity), but in the form of hard USDT cash from LFG reserves, or raised capital. Only in the worst case scenario LFG should consider new equity.
If LFG does not commit to the UST holders compensation, the new project will be plagued with accusations of default to the prior senior debt holders, law suits and criminal investigations. Law enforcement will go after new Luna, no investor will ever invest a dime in the project, the devs community will collapse and Terra will seize to exist. Furthermore, Do Kwon and Terra management may face criminal charges and arrests. I think everybody will agree that any successful new project development in such environment is absolutely impossible. I, as a Luna holder, on the other side, have an interest to own a share in a successful project, surely just like all the other Luna holders.
I understand that equity holders have suffered the most, yet, I believe, that’s the only way forward. Equity is the riskiest asset, as opposed to far less risky stablecoin debt. LFG should take responsibility for paying off debts to UST holders, partially, at the time of depeg. Our Luna price has always been driven by the demand for UST as a stablecoin, and the Anchor yield. We, as equity holders, have an obligation to ensure that LFG pays off its UST obligations, so that our equity is not plagued by accusations going forward.
Once the commitment to UST holders is made and emotions subside, it will make it much easier to work as per @wlawyer framework to agree on %-ages and caps for UST holders and new equity splits for Lunatics. What say you?