Ethereum co-founder Vitalik Buterin thinks that the Terra project should prioritize small holders as part of any proposed reimbursement plan.
The Terra eco-system suffered a death spiral which resulted in Terra (LUNA) tanking 100% and the TerraUSD (UST) stablecoin losing its United States dollar peg.
With LUNA and UST investors reeling from substantial losses, the community is now looking at ways to restore the ecosystem and potentially offer relief to the many people who got burned financially.
One such community proposal is to first compensate all of the initial deposits of small UST holders to greatly improve general morale and sentiment while figuring out how to sort creditors and larger investors later.
The Ethereum co-founder showed support for the idea, stating that the focus should be on the smaller investor who needs the money, before going a step further by suggesting that the whale holders should cop the loss.
While Vitalik didn’t openly call for regulation, he did highlight that potential covers such as financial deposit insurance could be useful in these conditions.
At this stage it is unclear if the project will be able to rebuild or if it will aim for a temporary resurgence to recoup investor losses. It is also worth noting that the proposal relating to Vitaliks comments was updated over the week and is now weighing up paying out all users up to a per-wallet cap of $50,000.
