A Sensible Decision-making Framework

We aren’t going anywhere until we have a sensible decision-making framework for people to evaluate the different proposals. This post seeks to drive attention to the fact that it will be fundamentally impossible to implement any proposal with community support because there is currently no framework for decision-making.

TLDR: Too much noise. Need leadership and decision-making structure immediately to evaluate proposals and relay information.

Why I made this post

I am a restructuring lawyer working at one of the top international law firms. I have worked on collapses and restructurings worth billions of dollars affecting both retail and institutional investors and have represented clients across the capital structure.

This LUNA-Terra debacle has obviously interested me and I am very excited to see how the first community-led restructuring on this scale plays out. But looking through the forums, I noticed that the current method of discussion saving the project is incredibly inefficient and will likely lead to the end result of nothing being agreed.

The Problems

(1) Stakeholder Groups with different interests

We currently have one massive forum for discussion which includes stakeholders with incredibly different circumstances.

The interests of a LUNA holder and a UST holder are obviously opposed. People holding LUNA bags want to drop the UST holders to save their own bags and the UST holders want LUNA holders to fulfil their end of the ‘bargain’ to secure the UST debt.

Similarly, the interests of a person who held LUNA from pre-attack to zero is vastly different from a person who bought LUNA at a discount while the dilution mechanism went into overdrive. And a person who rode UST to zero (believing it was a savings account) has interests vastly different from a person who was speculating on the UST peg returning to $1 (a distressed debt investor).

You simply cannot expect all these people to agree on a proposal together in an unmoderated unregulated forum.

(2) Difference in sophistication

To add to the mess, participants here possess very different levels of sophistication. There are some incredibly experienced and insightful sophisticated parties here with experience in finance, economics, math and related fields but there are also a lot of disgruntled retail investors who honestly just want their money back.

This is adding to the noise and from reading the forums, it is clear that most participants fundamentally do not understand most of the proposals and are most interested in what it means for their own bags (understandable) instead of looking at the big picture and the competing interests which need to be balanced in an effective resuscitation of the Terra ecosystem.

(3) Lack of Leadership

There is no leadership and more specifically, there is no leadership structure. There needs to be a way for certain persons to drive proposals with sufficient support forwards. In the tradfi space, we have a steering committee or coordinating committee which takes the lead in a restructuring with input from other holders. More on this later.

(4) Competing Proposals

There is a multitude of competing proposals, some of which are incredibly sensible and others which are based purely on pure speculation of what assets may or may not exist as backing or collateral. Add in all the clearly biased proposals to salvage bags in one’s personal circumstances and we get a situation where we will never reach a consensus.

The Solutions

We need to create a comprehensive and sensible decision-making framework to vote on and put in a leadership structure to implement a refined proposal to rescue whatever value is left for all the stakeholders. In order to do so, we need:

(1) Different forums for different stakeholders

Nobody has exactly the same situations but we should broadly categorize the stakeholders into different classes. At first glance, it is:

(a) LUNA holders pre-attack (Equity)

These are the holders that were not diluted by the out-of-control dilution mechanism. These are participants that are medium-high risk participants who participated in the equity upside knowing they will suffer on the downside (but probably not to the extent things actually played out).

(b) UST holders (Debt)

I have not split them into pre-attack and post-attack UST holders because no new UST has been minted. UST holders are effectively senior debtholders that took low-risk on their initial investment. The fact that they could have exited at a discount or bought at a discount probably does not justify splitting the classes.

(c) LUNA holders post-attack (now)

These are the holders that speculated on LUNA knowing the dilution mechanism was out of control. These are super high-risk participants buying effectively equity in a failing ecosystem hoping to make massive multiples on their investment.

Note that LUNA holders would not have had separate categories if not for the ridiculous dilution mechanism.

(d) Developers

These guys will drive value to the new platform.

Please note that I am not advocating for any economics here, I am simply dividing persons into groups that need to agree in order for any proposal to move forward.

Practical implementation: Snapshot to determine who belongs to which category (people may belong to multiple) and clearly display what sort of holdings each person has. Set up different forums to focus discussions (i.e. the UST forum evaluates proposals from the perspective of UST holders).

(2) Leadership

Each class should appoint their own representatives and all the representatives should collectively form a coordinating committee (CoCom). The CoCom should have the responsibility of discussing the proposals behind closed doors, each representing the concerns of their own class. This will allow the noise to be tuned out of discussions.

(3) Difference in sophistication

There are a lot of worried retail investors out here. With a leadership structure in place and different class forums, representatives of each class will be able to account to their respective class a TLDR of what is going on in discussions and how it will affect the class.

A less worried retail investor class should focus discussions more effectively - especially if they know what they are actually discussing.

(4) Competing Proposals

It is not all-or-nothing but it sure looks like it on the current forums. If each class appoints their own representatives, their representatives can actually review all of the sensible proposals and come up with one that makes sense for all stakeholder classes. Such a proposal can then form a starting point for discussions within each class

It does not have to be perfect - we just need to stop throwing rocks at each other’s glass houses and build something that works for everyone. It won’t be perfect but it will be better than nothing.


  1. New forums should immediately be set up to focus discussions from the perspective of each stakeholder class
  2. Snapshot or some sort of mechanism should be used to determine each participant’s holdings and exposure
  3. The classes in the forums can determine among themselves whether it needs to be split into further sub-forums.
  4. The classes should all appoint representatives to form a CoCom
  5. The CoCom should discuss proposals with TFL and relay these discussions in easy-to-understand form to their own forums.
  6. Voting based on class to pass a proposal. Perhaps a 2/3 majority of persons voting?

Concluding thoughts

This needs to happen or we are actually going to go to zero. UST holders should accept that they may have to accept a haircut and LUNA holders need to stop dreaming that they are getting their Lambos back. LUNA speculators should also give up their dream of going 5000x. We need a compromise here.

Additionally, once we get a refined proposal on the table, we can actually start talking about getting interest from potential rescue financiers because there will finally be a project that is investible.

I have tweeted about all these a fair bit: https://twitter.com/wassielawyer


As long as our UST goes back to a certain value it is better than nothing. Even a UST worth $0.6 is good enough vs $0.1. Maybe some ideas which will allow everyone in the community to regain at least 50% of what was lost would make everyone whole and restore some trust in the ecosystem.



And we are never getting anywhere if LUNA holders and UST holders are in the same forum trying to rob each other. UST holders want full recovery. LUNA holders want UST holders to go kick grass. LUNA post-crash speculators who bought LUNA for a fraction of a penny want LUNA to go back to $1.

There needs to be a compromise and a framework to reach a compromise.

It doesn’t have to be this one. But there has to be one that is better than people yelling at each other in the web3 equivalent of a marketplace in the 1300s.


While most of the things you say make sense, you cant punish people who bought the crash, as if they wouldnt the price would still be 0. There seems to be a purchasing frenzy atm as price does go up slolwly.
2. The investors who got out at a crash fuels the crash and the selling pressure so they kind of did it to themselfs. Whenever you buy a stock if it dipps you loose if you sell, you cant just go an knock on apples door to give it back to you.
3. I feel for people who lost but now its the time to buy back again and maybe weather the storm.
4. The algo can be patched, im sure that the programers know to stop the backdoor, and maybe in thenfuture they need to be more humble and listen when somebody finds a bug.
5. The brand and thr name is there so it just need rebuilsing not starting from new, if its a healty ecosystem it will heal itself over time.
6. Also what your suggesting with the leadership structure is moving away from dex and becoming more of a cex making decision. Im sure the programers can buil in the code that everyone who stakes luna can vote for any proposal.


People who bought the crash aren’t being punished.

As per the above, they would simply be discussing in a different forum because their interests are different. They would have an equal voice in any proposal going forward.

Also I am not suggesting we move away from decentralized decision making. Decision-making should stay decentralized but implementation needs to be centralized and information flow needs to be set up.

You aren’t getting information flow from people yelling at each other and screaming ‘WHAT ABOUT MY BAGS’ in every forum post.

Also I don’t want to discuss price here or economics (not the point - the point of this post is to discuss a framework) but the price movements are likely the market pricing in the potential restructurings. I would expect the price to actually go up significantly once we actually agree on something!


no real way to determine who bought pre/post crash because of CEX and bridged tokens so there is no reason to have separate forums.


well i had no choice
first days i was down
-500 k$ , 5 years of life saving gone
then i undestand the whales game sell off and mint , so front run and
short. I was up +100k$ with dry
powder cleaning my initial loss, to be back in game , then stop.

Then i bought the dip just for gambling , i did not expect to be up so quick
Pretty much high rollercoaster vol. It can happen again.


All the best for all of us good luck everybody!


Agree that people buying at diff stages will likely have separate intermediate interests, however we should all have a common vision in order to achieve the similar pre crash success, everyone may need to make a slight compromise but people who bought after crash thinking they will make money(which btw is absolutely a legit investment 101 reason) must not lose their current LUNA tokens even if a V2 is launched or something. Whoever has their token must still have the opportunity to keep making money. After all thats the sole purpose coz blessings alone don’t buy meal :slight_smile:


the new TERA coin will be distributed among all UST holders and tomorrow it will be 1 dollar

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save the idea and the project, 99% of people buying during the crash are speculators that would anyway dumped as soon as a decent price were hit


Highly unlikely this will get consensus. Interests far too wide spread and cacophony too loud.

Clean cut and merge/restart/migrate are basically the options for builders. The sooner luna/ust holders accept they now hold a memecoin the better. If restart some big open questions on economics of terrav2 and how it would grow. UIs are easy to migrate to a different chain.
Some people here need to wake up and face reality.

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That is why this isn’t a proposal proposing any economics.

This is simply a proposal saying we need a more structured way of discussing what the economics should be because without one, the economics we are getting is zero.

The fact that there are a bunch of replies thinking this is some sort of economic proposal just furthers my point that focused discussions need to happen.


You can design the system so that buyers or customers can burn their own Luna tokens

I think we should let the eco-system recover naturally without playing any intervention games. Whatever it will be at the end is what it is.


This is the most sensible thing I’ve seen proposed in this forum in the last 3 days


can you represent ust holders? . i propose tabs on this website that assorts each asset class to a discussion room. Also, their is need to speed up the decision before terra is termed a dead project, we will lose a lot of developers who are a competitive advantage in the defi space.

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reading the replies and everyone is trying to defend their bags again. YOU BAG IS USELESS WITHOUT A DECISON.


look, I had money in Luna before attack, wasn’t in fact a small part of my portafolio… But I still fail to understand why you all are making a distinction between Luna holders pre-attack, and post-attack…

Equity is equity… When I invested in Luna, I knew this could happen, it wasn’t a hack, or anything, the protocol just behaved as it was supposed to…

The only thing that it didn’t behave properly was the LGF, I honestly didn’t expect the BTC reserves to be burned so quickly for nothing. If you have 20B in UST, and 30b in Luna, you at least should have 15B in BTC, NOT to guarantee the peg (no algo stable coin can guarantee that, as they are colletarized with a volatile asset - Luna and BTC -), but as a collateral so the downside for Luna is only the remaining 5B and you don’t enter in a dead spiral.
UST holders would at least know for sure, that their ass is backed up in the medium term with a more or less liquid asset. Worst case scenario is to wait a bit till BTC ramp up. Still, a sustainable scenario for most of us… the peg would then be something like 0.75 in the mean while.

It is really a pity to hear that Terra is giving up on a algo stable coin, cos I do believe something like that can work, you can’t call it stable coin, but maybe semi-stablecoin… it has his own pos, and cons. It is a stable coin that can go to 0 if BTC goes to 0, so it is not 100% stable, but at least it is not volatile…

But all and all, this is crypto for god sake… You can make +2000% in one day, and you can go to 0 in another… Stop crying, I also lost quite a bit of money, but go again to the chart and look at Luna and tell me we can’t do it again… We can double what we lost, for sure! People should be excited about it, as I am…

If terra is by any chance back again, it will be the most trusted algo stable coin ever… Just don’t call it stable coin, and explain it transparently…


Investors who buy LUNA know exactly that it can be worth 100 or 1 or maybe 0 since it is volatile.
Investors who buy UST assume that their money will not disappear because UST is “stable.”
During a crash people take refuge in stables for that very reason, because their money should not disappear.
As a UST investor, I could assume 50% of the money back and receive the rest in some type of vesting while the ecosystem heals or profits are generated for some type of fee or perhaps a part in the new token and everyone would know when to sell it. .
But the part of the UST investors must be insured in USD