The recovery plan for funds lost due to the collapse of the Terra project should prioritize small holdings. This view was voiced by Ethereum co-founder Vitalik Buterin.

Strongly support this. An influencer, personal responsibility, and coordinated sympathy and help for the average UST small owner who was told something silly by the SFYL for the rich about “20% interest rates on the US dollar.” https://t.co/YfNlpvAizg

— vitalik.eth (@VitalikButerin) 14 May 2022

On May 8, the algorithmic stablecoin TerraUSD (UST) lost its pegged value against the US dollar. This happened against the background of the exit of assets from the Anchor protocol as the rate of return on deposits dropped to 17.87%.

On May 10, the asset’s quotes fell below $0.62. The decline continued on May 11, after which the LUNA cryptocurrency used to issue the UST fell to $0.3. At the time of writing, UST is trading around $0.136, while LUNA is trading at $0.0002 (CoinGecko).

Buterin promoted the idea of ​​one of the Twitter users under the pseudonym PersianCapital to compensate investors for their losses. Second, he noted that 1,000 Anchor wallets (out of a total of 256,000) hold 82% of the entire UST supply. The “poorest” of these addresses costs approximately 955,000 UST.

PersianCapital noted that a proposal to use the $1.5 billion reserve fund to recover user funds was discussed on the official Terra forum. This amount is not enough to fully compensate all investors. But PersianCapital said focusing on 99.6% of the “poorest” wallets would allow them to recover all their losses.

“I strongly support it. Coordinated engagement and assistance for medium and small IHR holders who have been bullshit about “20% of the US dollar” by the influencer. “For the rich, personal responsibility and regret for losses,” the co-founder of Ethereum wrote.

Continuing the subject, Buterin reminded that a similar approach to compensation is also applied in the insurance system. FDIC in the USA. 100% repayment is guaranteed for deposits up to $250,000 in the event of financial institutions insolvency.

“Singapore labor law is irrelevant but interesting: more protection for low-wage workers and stricter treatment of the rich. I think these are good hybrid recipes,” he added.

Recall that Terraform Labs CEO and co-founder Do Kwon offered a plan to resolve the situation around the UST and LUNA.

Binance head Changpeng Zhao criticized the idea of ​​a hard fork with the launch of a new token discussed in the Terra community.