Evening News | Terra plans to burn 1.388 billion UST; Vitalik and others jointly publish a paper titled "Decentralized Society: Finding the Soul of Web3"

Organizer: Nianqing, Chain Catcher

"What important events have occurred in the past 24 hours?"

1. Terra: Plans to destroy 1.388 billion UST through three measures, equivalent to 11% of the outstanding supply

Terra released an official statement indicating that it is rapidly clearing bad debts from UST circulation to restore the health of on-chain price differentials. The current measures include: Proposal 1164 will expand the size of the base pool and accelerate the burning of UST to help narrow the on-chain price differential. Terraform Labs has also initiated three additional emergency actions: 1. Proposing to destroy the remaining UST in the community pool; 2. TFL will burn the remaining 371 million UST cross-chain on Ethereum; 3. TFL has just staked $240 million worth of LUNA to defend against network governance attacks.

At the same time, TFL will transfer the remaining UST (371 million UST) deployed on Ethereum as liquidity incentives back to Terra and will use the burn module to destroy all of it before the results of the governance proposal. Overall, after executing the above three proposals, approximately 1,388,233,195 UST will be eliminated from the supply. This is equivalent to about 11% of the outstanding supply.

Additionally, this afternoon, the price of LUNA dropped to a low of $0.02, currently priced at $0.03, while the price of UST has risen to $0.58. (Source link)

2. Former Terraform Labs engineer: Do Kwon is an anonymous co-founder of the algorithmic stablecoin Basis Cash

According to Coindesk, former Terraform Labs engineer Hyungsuk Kang and a Basis Cash developer stated to the media that Do Kwon, the CEO of Terraform Labs, the creator of Terra, is one of the anonymous co-founders behind the failed algorithmic stablecoin Basis Cash. According to the revelations, Do Kwon deliberately distanced himself from the project's daily operations, but he proposed most of the core ideas behind Basis Cash and its underlying token model.

Basis Cash is known to be an algorithmic stablecoin project launched in 2020, whose token BAC fell below $1 just one month after its launch, currently priced at only $0.0071. (Source link)

3. Vitalik and others jointly publish a paper titled "Decentralized Society: Finding the Soul of Web3"

Ethereum founder Vitalik, along with E. Glen Weyl, a principal researcher at Microsoft Research, and Puja Ohlhaver, a researcher at Flashbots, published a 37-page paper titled "Decentralized Society: Finding the Soul of Web3."

The paper points out that today's Web3 revolves around expressing transferable financialized assets, but many core economic activities—such as unsecured loans and building personal brands—are based on enduring, non-transferable relationships. Therefore, the paper elaborates on how non-transferable "soulbound" tokens (SBT) representing commitments, credentials, and affiliations that signify "soul" can encode the trust networks of the real economy. At the same time, SBT supports applications such as community wallet recovery, anti-witch governance, and new markets with decomposable, shared rights. (Source link)

4. Web3 development platform Moralis completes $40 million Series A funding, with participation from EQT Ventures and others

According to The Block, Web3 development platform Moralis has completed a $40 million Series A funding round, with participation from EQT Ventures, Fabric Ventures, Coinbase Ventures, and Dispersion Capital. The funds raised will be used for product development, improving user experience, and expansion to increase its customer capacity and support larger clients.

Moralis aims to provide infrastructure for developers to build and launch cross-chain applications, games, and NFTs. (Source link)

5. Forbes: Gemini, BlackRock, and Citadel deny involvement in malicious shorting of Terra

Asset management company BlackRock and hedge fund giant Citadel Securities both emailed Forbes to deny trading TerraUSD. This statement comes in response to recent rumors that these financial giants borrowed 100,000 bitcoins (worth about $3 billion at today's prices) from cryptocurrency exchange Gemini to purchase UST, resulting in asset sell-offs that led to a market crash and destroyed over $25 billion in market cap for LUNA.

Earlier today, Gemini released a tweet denying that it provided a loan of 100,000 bitcoins to any large institutional counterpart. Following this, a Citadel insider confirmed that the company "does not trade stablecoins, including UST." Additionally, BlackRock spokesperson Logan Koffler stated, "The rumors about BlackRock's involvement in the UST crash are absolutely false; in fact, BlackRock does not trade UST." (Forbes)

6. BTC price drops to a new low since 2021, ETH price falls below $1700

According to market data, the price of BTC dropped to a low of $245,000, setting a new low since 2021, while the price of ETH fell to a low of $1633.

"What excellent articles are worth reading in the past 24 hours?"

1. "Opinion: The key to Web3's success is to strip away complexity so that most people never know it exists"

Ordinary people do not understand blockchain, fungibility, or stablecoins. They do not need to understand. Vending machines are a great analogy. Most people do not understand how vending machines work, but the average person spends $62 a year on vending machines.

Today, Web3 has not yet "crossed the chasm"—we are still in the "early adopter" phase of the technology adoption cycle. Although OpenSea's trading volume reached $14 billion in 2021, it only had about 250,000 active buyers and sellers; 70% of the trading volume came from about 20,000 users. In contrast, eBay has 183 million buyers. To become mainstream, Web3 needs to make it easy for ordinary people to use.

2. "UST crash, can we still trust the official algorithmic stablecoins of other public chains?"

After the algorithmic stablecoin in the Terra ecosystem achieved success, public chains like Waves, NEAR, and TRON launched their own algorithmic stablecoins. Now, Terra has fallen from grace, with UST depegging to a low of $0.20, and LUNA also briefly dropping below $1. In light of Terra's experience, do other public chains still need to push their own algorithmic stablecoins?

3. "Why are DeFi options protocols generally underperforming?"

The significant growth of DeFi has been accompanied by expectations of "institutionalization." As blockchain developers build new products and TradFi navigates compliance minefields, on-chain opportunities for options, derivatives, and structured products have become increasingly apparent. However, compared to products from centralized exchanges like Deribit, the current on-chain driving force for options is negligible.

This article reflects on the overall trends in the on-chain options space, existing pain points, and how to improve options products. It is clear that founders understand the size of the bonuses. We have recently seen explosive growth in options protocols, and more options protocols are expected to launch in the coming months.

4. "The Terra ecosystem is caught in a death spiral, how do crypto industry KOLs view it?"
This article is a selection of opinions regarding the Terra incident, covering project evaluations, event impacts, lessons learned, and more, as compiled by Chain Catcher.