Why does Ethereum co-founder Vitalik Buterin want compensation for Terra holders?

Terra holders have faced huge losses followed by the collapse of the Terra network that was created by the depegging of stablecoin

Vitalik Buterin, the co-founder of the most popular smart contract Ethereum network, thinks that holders of Terra network’s stablecoin and its native token LUNA should be compensated following the significant crash that it witnessed last week. This instance has sparked a widespread sell-off in the huge cryptocurrency market. This blew up the situation in the market and kicked off the Terra USD algorithmic stablecoin depegged on the fiat currency dollar earlier this week, initiating a death spiral, as one of the analysts put it, the value of the coin and the LUNA token. 

As the community of stablecoin emerged from the collapse of the native token, Buterin endorsed one of the suggestions of users from Twitter that if Terra just focussed on its most poor 99.6% of the wallets, then they should make the massive group of whole 100%. The Ethereum co-founder quoted in the tweet on Saturday said he strongly supported it. 

He tweeted that coordinated sympathy and some relief for the average smallholder of the UST stablecoin who got to tell something dumb that 20% interest rate over the US dollar by an influencer while having personal responsibility. He said that he was sorry for the loss of the wealthy. 

The founder of the second-largest cryptocurrency suggested the government’s intervention while saying that FDIC insurance is an apparent example of reimbursing people who have made the loss of their money while citing coverage of about $250,000 per person on an average. He also referred to a separate rule of Singapore about it. 

He wrote in the tweet that an interesting thing that is unrelated is employment law in Singapore. More strong regulation for employees with low earnings and an approach for more figure it out yourself for the wealthier. He stopped short of calling for more regulation, specifically in the sector. In the meantime, Do Kwon, founder of Terraform Labs, had attempted to make a reversal the fortunes of TerraUSD holders, which was the third biggest stablecoin in the whole crypto space before it lost its peg with the dollar.