TechFlow news — Terraform Labs (TFL) has announced three emergency measures to eliminate UST bad debt:
1. Proposing to burn the remaining UST in the community pool;
2. TFL will burn the remaining 371 million UST bridged to Ethereum;
3. TFL has just staked 240 million LUNA to defend against network governance attacks.
TFL stated that these measures will burn a total of 1,388,233,195 UST—approximately 11% of the supply—effectively reducing UST bad debt and alleviating UST's peg pressure.
Earlier, Terra founder Do Kwon urged the community to vote in favor of governance proposal Proposal 1164, which aims to increase the size of the BasePool (the virtual liquidity pool for UST-LUNA) within the LUNA-UST minting and redemption module, while reducing the PoolRecoveryBlock requirement (the number of blocks needed for BasePool to automatically revert to equilibrium). This would improve the efficiency of the "burning UST to mint LUNA" rebalancing mechanism and accelerate the absorption of excess UST supply.
