Golden Sentinel｜TFL is taking a number of emergency measures to clear UST bad debts

Jinse Finance reported that on May 12th, Terra (UST) officially tweeted that the peg pressure caused by the current oversupply of UST is seriously diluting LUNA . At 10 a.m. on May 12th, Beijing, the daily increase in the circulating supply of LUNA has reached 186 million pieces, and the total circulating supply has reached 1.525 billion pieces.

Several measures are currently being taken to control this phenomenon:

The first is to launch Proposal 1164 to expand the size of the basic pool and accelerate the burning speed of UST to help narrow the price difference on the chain.

Secondly, TFL (Terraform Labs) has launched three other urgent actions:

1. Propose to destroy the remaining UST in the community pool;

2. The 371 million UST cross-chained to Ethereum will be destroyed across the chain on Ethereum .

3. Pledge 240 million LUNAs to defend against network governance attacks.

After three emergency deployments, 1,388,233,195 UST will be destroyed, accounting for about 11% of the supply, which will effectively reduce UST bad debts and ease the anchoring pressure of UST.

In addition, voting on the complete Agora proposal to destroy the remaining UST in the community pool (including the proposal to destroy cross-chain UST) will go live soon.

During the execution, TFL will migrate the remaining UST deployed on Ethereum (371 million UST) over the past few months as a liquidity incentive back to Terra, and use the burn module to destroy them all before the outcome of the governance proposal.

From these measures, it can be seen that TFL is currently exploring the best way to destroy its remaining UST holdings. These methods are aimed at absorbing the selling pressure of UST in various open markets.

The tweet also stated that the elimination of system bad debts through the above projects will help restore the on-chain transaction spread to a meaningful level, thereby significantly reducing the peg pressure on UST. Once the new base pool proposal is passed, the process will be expedited.

Finally, it is also clearly prompted, "TFL has been in combat for the past four days and has been continuously researching solutions and potential ways to help affected users stop bleeding."