For the original Mainnet, I completely agree with what is exposed in A Sensible Decision-making Framework
There are many conflicting interest, but with the most of the people damaged in mind, and considering the priority of the debt obligations, the best most effective solution is without a doubt what is outlined in [Proposal] Tiered repayment: 1:1 USDC refund to all UST holders up to a certain cap per-wallet using LFG funds, favouring small wallets
While the original Mainnet sorts itself out, one way or another, maybe including legal means and probably against the interest of small investors and loyal holders, Devs like Chen (https://twitter.com/stablechen) and the TerraBuilder Alliance can create a new blockchain for the community.
In my original proposal I called the new chain a fork, and it is not correctly defined. It has to be a new blockchain, true to the spirit of Terra and its community, with new token/s airdropped to to the users, but completely unrelated to LFG, TLF or Do Kwon. These entities, before anything else, must be held accountable for their actions and fulfill their debt obligations.
As exposed in my previous proposal (Two tokens, Two snapshots and justice for all)
The people that held Luna did it because they wanted a volatile asset to capture the amazing upside Luna has had until the attack. Those that held UST did so because they wanted an stable asset able to generate yield in a predictable manner. Both kinds of community members have been equally vital in the growth of Luna and both kinds should be compensated according to what they have lost.
My proposal, create a new blockchain based in the two original tokens (Luna v2 and UST v2 with new names), Make two snapshots and distribute the new tokens for those that held Luna or UST before the attack AND kept holding even at the very bottom of UST price. Distribute to the holders according to the smallest amount they held when comparing the two snapshots.
In my initial proposal I placed the second snapshot at the time the new chain is launched. That is wrong, as it would allow bad actors to re enter UST and Luna and have a share. It’s much more effective to filter them out to do the second snapshot at the moment UST reached its lowest price (Luna was already out of control and its price is not a good reference).
if the priority is, citing Do Kwon:
“What we should look to preserve now is the community and developers that make Terra’s blockspace valuable – I’m sure our community will form consensus around the best path forward for itself, and find a way to rise again.”
Setting individual interests aside, anybody with an honest view can recognise that the backbone of the community are those that held both before AND after the crash, be it Luna or UST, those that interacted with the chain, that had skin in the game before the attack, that kept believing in the project, the team and THEIR WORDS AND PROMISES, that remained patient awaiting a solution while seeing the bank run unfold in front of them.
The distribution of the new tokens should include the tokens held on chain, staked in the different protocols or providing liquidity in Terra or other L1s.
Should not include the tokens in centralised exchanges, as these are the ones that have been used to especulate, dump, and mess with the peg in general.
Don’t make people burn original tokens when launching the new chain, let original Terra sort itself, hold the institutions and people behind it accountable, through legal means if necessary.
Doing the two snapshots and restricting them to Mainnet and other L1s, we get two things:
- Filter out most of the bad actors and especulators, rewarding the true community, people that is much more likely going to keep holding, building and fighting for the ecosystem.
- It allows to start fresh with far less tokens in circulation and move from there.
It will not satisfy everybody, but lays a solid foundation based on reliable investors.
Furthermore, it doesn’t need to satisfy everybody, because it is a new chain.
No one loses anything (on top of what has already been lost), some are rewarded, some are not, and even if rewarded everybody will still be at a loss, because new tokens won’t have that much value anyway.
Protocols and devs of the ecosystem should be awarded also the new tokens depending of their previous holdings as outlined above, plus incentives, with the only condition to build in the new layer (not needing to abandon the original).
Regarding the two token model, I still think it is the best option, as no one can deny as it has been the main driver of Terra success. A new UST analogue should be collateralised, at least partially, and wouldn’t need to be launched at start, allowing the protocol get funding for it over time.
Even starting with only native token my proposal for a new chain based in the two snapshots is still valid, and distribution could be something similar to what is outlined in https://classic-agora.terra.money/t/luna-go-forward-proposal/7136:
- 40% to Luna holders considering both snapshots
- 40% UST holders considering both snapshots.
- 20% community and protocol incentives.
The algorithm working as intended has led the protocol into a death spiral but is not the cause of it, it’s been human greed, lack of planning and preventive measures, slow reaction, and an unhealthy dose of ego.
That has nothing to do with the algorithmic nature of UST, and the catastrophe and resulting disgrace for thousands of people should be honoured learning the lessons and applying them, compensating the believers in the project instead of jumping to the next project with billions in the pocket and leaving behind the corpses.
Let’s put the protocol, a new one if necessary, in the hands of the community.
Wishing you all the best.