Summary
Instead of forking, I insist in burning. My proposal basically consists in creating a fund that will collect LUNA and UST from current holders, which will be burned after a defined period of time. In exchange for those LUNA or UST, you can either receive USDT or 2 different Tokens, at predefined fixed exchange rates, which in time depends on how fast deposited LUNA will be burned. One can also purchase LUNA (but not UST) back from the fund, but to prevent a positive feedback loop that could lead to the failure if the system, if you plan on re-selling it to the fund, you’ll need to trade in a bigger amount than before. This means the system has to be able to trace which wallets have already traded with the fund and also that only wallets from platforms that can be controlled would be compatible. Last but not least, this system will be available only for a defined period of time, this is a deadline, defined from the date of launch, after which whatever LUNA or UST remains in the fund will be burned.
Motivation
I think everyone deserves a chance to at the very least recover their investment in LUNA and UST, regardless of the price at which they invested. We all want to profit from our investments. Let’s not pretend we didn’t get into this project with the idea of earning money in mind. You may have bought LUNA 5 years or 1 minute ago, but still, you should have the right to be treated with respect and given a chance to profit or at least break even or cut your losses. I believe the higher-ups in TLF are not taking everyone into consideration and are trying to benefit only a few with their proposal and it will cost the entire Terra project the most important thing in any commercial venture: the trust of the investors.
Proposal
You may already have noticed, but I don’t have any background in programming or coding. I don’t even understand the lingo used in crypto very well, but I think I at least understand the fundamental concepts to form a big picture in my head of how this all works.
Instead, I know quite a bit of molecular biology. You may not know it, but one of the biggest sources of inspiration for some of the biggest engineering projects ever made is, in fact, nature, and there are certainly a bunch of cellular mechanisms designed to deal with the accumulation of waste and nocive substances in cells, that would otherwise lead to the death of said cells. These are, of course, not infallible, but I think we could use them to inspire ourselves and find a solution for the huge mess we are currently experiencing in the Terra ecosystem.
With that said, because I am perfectly aware that I lack the technical knowledge to actually lead the development of the system I’m about to describe, for this to work we would require the participation of experts in this field, to design something that goes along the basic idea.
As I see things, the current problem lies in that there’s an excess of LUNA in the market, which has diluted the value of each token. The problem is, each and every single one of us spent actual money in whatever amount of LUNA (and UST) we own now, and I’m a cynic so I don’t think there’s going to be enough philanthropic people out there, that would voluntarily burn their tokens in exchange for nothing, to solve this problem.
My proposal basically consists in creating a fund that will collect LUNA and UST from current holders. This fund will, in time, hold those tokens for a fixed period of time (grace period; maybe 5 days from the moment they are deposited), after which those tokens will be burned. There should also be a deadline (maybe 3 months) for this project, after which any remaining LUNA or UST in the fund would also be burned, regardless of whether it has reached the above-mentioned time.
In exchange for your tokens (LUNA / UST), you can choose to receive either USDT or 2 different new tokens (let’s call them RevA and RevB for now), at predefined fixed exchange rates for each option, depending on certain conditions:
*Note: the calculations in the following items are just an example. Actual values may be different and would require a deeper analysis of the *
- USDT: I see this as the option for those who bought luna during the collapse and may have invested smaller amounts of money, so they might just want to cut their losses or break even. In this case, you would receive, for example, USDT = LUNA x 0.0001 and USDT = UST x 0.001. This way, someone that may have purchased 1,000,000 LUNA for $100 USD at 0.0001 each will break even and someone who invested that $ 100 USD to buy 2000 UST at 0.05 each, will actually profit from it. Of course, those who bought LUNA or UST at higher prices will not benefit as much (I include myself in this group, as I spent most of the money I’ve thrown into LUNA when it was at around $29 USD), but the losses are reduced. There’s still another way to profit from this whole thing, which I’ll mention later, while being paid in USDT directly, instead of the Rev tokens.
- Rev tokens: in this case, you will be basically trading your LUNA or UST for a new coin, which will require the efforts of the community to raise its value to something useful. Remember that the end goal is to burn LUNA so that it itself can recover its value, so there should be only a very limited supply of these tokens to incentivize a fast turnaround of assets. This, in time, will probably make these Rev tokens reach high values after some time and maybe become even more valuable than LUNA itself. As I mentioned above, there would be 2 kinds of Rev tokens, that would be priced differently, as follows:
- RevA: This would be a more expensive token, meant to collect huge amounts of LUNA and UST fast. The value of this token resides in that A) there’s going to be less of it than RevB to incentivize biggest purchases; B) it will be priced at a higher amount of LUNA or UST, maybe 100 times higher, than token RevB; C) the entry price for this option must be high. Let’s say a minimum of 10 million LUNA or the equivalent in UST; D) all the LUNA and UST collected via this token will jump the grace period and instead will allow them to be instantly burned. I’d say the exchange rates should be something like: RevA = LUNA x 0.01 or RevA = UST x 0.1. This way, if we manage to make RevA token be priced in the market at $0.1 USD, someone who invested only $100 USD for 10,000,000 LUNA at 0.0001 would receive 100,000 RevA tokens which could be traded for 10,000 USDT in the markets. In my mind, this is a crazy opportunity and wouldn’t be too hard to achieve.
- RevB: this would be the token for those holding smaller quantities of LUNA and UST. The entry price must be lower than for RevA, but not so high as to prevent people from buying it. Maybe 10K LUNA?. The total amount of RevB has to be much higher than RevA to give it a widespread reach within the community and it will not affect the grace period for the LUNA and UST collected via this token. The exchange rates should be better than for the direct trade of LUNA or UST for USDT but not as good as for RevA, of course… Maybe RevB = LUNA x 0.0005 and USDT = UST x 0.005 ? Again, these rates are just examples. In this case, profit would be 5 times higher than with the USDT trade option but much lower than the profits form trading for RevA instead.
Keep in mind that these potentially high benefits with the Rev tokens could also incentivize people to buy more LUNA and UST, to trade those for these Rev tokens, ultimately aiding in a faster reduction of the circulating LUNA and UST supplies and restoring its values.
Now, you might be wondering why there’s a period of grace for the burning of the LUNA and UST collected with this system. Here’s the other way I mentioned you could profit directly in USDT, if you are smart enough, and also the mechanism by which we could raise USDT to trade for LUNA and UST:
You are allowed to buy back LUNA and UST from this fund, so you may still be able to trade those in the markets and maybe raise some money. However, to prevent a positive feedback loop that could lead to the failure if the system, each time the same wallet trades LUNA or UST for either USDT or the Rev tokens, the mechanism will ask you for 10 times the previous amount of LUNA or UST you traded before. Again, this will also accelerate the pace of the collection. All the USDT collected via this mechanism will be used to buy LUNA and UST from other users.
The RevA and RevB tokens created in this whole process can even be some form of NFT or something collectible? IDK. You are the experts.
Finally, once the deadline is reached, whatever LUNA or UST remaining in the fund will be burned and any USDT collected should be sent to the TFL community pool, to be used as reserves to face future threats to the ecosystem.
I’m totally open to further recommendations and fixing any potential loopholes in this proposal. However, whatever you may want to change has to be oriented to burning LUNA and UST to restore it’s original values and NOT to a forking mechanism.