Buyback and burn ustc minting by Terra Rebels mistakes

Again (1st - September 22), because TR didn’t close swaps and incorrect quotes (Malaysian Ringgit Price Today - MYR to USD Live - Crypto | Coinranking), a huge amount of USTC was printed.

TR must admit its mistakes, close these swaps, buyback and burn this amounts of printed tokens, because this is 100% TR mistakes. All amount, for two times. Otherwise it’s another spit in the face of the holders USTC.

P.S. Also. This is another reason to stop the distribution of any “tc” tokens.


This is not a TR mistake. It is an oracle pricing issue (and has to do with too many validators having the same data source). I will be attempting to work with certain validators (as others may as well) to identify the problematic data source(s) that the oracle price server uses.

The issue was addressed with validators in a prior post. Hopefully identifying the problematic data source(s) will help them in determining, and varying, their data sources.

I hope that helps out a little bit, and that you are doing well today :slight_smile:

NN, try math.
Compare less than 3m with 10 billion.
See what % you get. Now tell me how huge it is.

Shouldn’t you be demanding Do Kwon/TFL to buy back and burn that excess few trillions they oopsied?

@aeuser999 when available, can you break down what happened, why it happened, how it led to a mint, how we can stop this from happening, when are these changes going to be made?

From what I saw on Twitter this was an exploit/hack to mint that much USTC. This is not good. We should have zero minting period. All these gaps need to be plugged.

I would appreciate more information. Regards.


This is a scam, even if 0.000001%. No one promised that LUNC would be stable. Do Kwon is caught and he can get 100+ years in prison.


How is it a scam?
You do realise that before crash - USTC wasn’t the only stable in Terra ecosystem?

And while USTC isnt stable anymore along with other non-stables, they can still be swapped.

Arbitrage was the point of Terra.

So what are the next steps we can do now, how can we avoid this to happen again?

The system (ie. protocol) is designed to mint and burn - I know that may not be popular, but it was the way it was designed per the market module, and updated in columbus-3 to a constant product, as a way to balance out the swaps between protocol coins when swapped through the system (it is what enables a constant product for the virtual liquidity pool - with the limitation for pool recovery period in number of blocks). The market module (and accompanying custom modules) are the current application on this application specific blockchain (the application it was designed to run, and at least until the depeg it was the application that distinguished it). The LUNA v1 <> TERRA v1 “stable” swaps were shut off as a result of this pull request back in May 2022 to stop the oversupply of LUNA v1 as it continued to devalue (since more and more LUNA v1 was required to mint to exchange for the TERRA v1 stables, particularly UST, that was being swapped back using the protocol).

Unlike LUNA v1 <> TERRA v1 “stable” swaps (which are closed), the TERRA v1 <> TERRA v1 swaps are still active. The protocol still sees each of the TERRA v1 “stables” as a synthetic of their real world counterparts (and prices them at their real world values). When oracle pricing data sources feed bad information, and the validators are not using varied sources, and that data source feeds wrong information, it allows a situation where there is a mismatch in underlying value. Since all TERRA “stables” are denominated in SDR, when you swap one TERRA “stable” for the other “stable” it burns the one stable and mints the other stable (even though it uses the same side of the virtual liquidity pool). Where the underlying value in SDR is the same, the value between the mint and burn is cancelled. When there is a discount due to mispricing, then that particular swap is no longer of equal underlying value and the minting outweighs the burning, even though they are trading into the same side of the virtual liquidity pool (so it shows an increase in minting - I believe the same would happen if the mispricing were in the other direction and someone just happened to swap out of the mispriced “stable” during the mispricing within the protocol, it would burn more than it mints).

It is true that EK did make a proposal discussion in Oct 2022 to make the tobin tax 100% for all TERRA “stables” (to discourage swapping TERRA stables through the protocol), and favored that approach to removing them from the whitelist (which removing them from the whitelist would effectively make them unusable within the protocol for those who owned them). He did mentioned in that proposal discussion that “We are leaning towards the tobin tax approach so that community members who may want to help build the oracle reward pool could do so by swapping their stablecoins to USTC, thus sending all swapped USTC to the oracle rewards pool.” I had concerns due to the tobin tax on SDR, as well as the removal of SDR from the whitelisting (the alternate solution), since the protocol internally uses SDR to value everything. Since I did not see any testing results that indicated how the protocol would deal with either no SDR pricing, or a 100% tobin tax on SDR, it was one of the concerns that I had raised. I had further reservations since it appeared that mitigations did exist and it appeared to be a fiat pricing data source issue. At EK’s suggestion, I did do research, and posted a possible solution to the validators (and have posted essentially the same thing to validators in another venue, and have referenced it multiple times in regards to the oracle pricing data sources and fallback order).

The real issue in the last MYR situation in Sept 2022, as well as this situation, is the data source itself, and that too many validators were using that same data source, or sources that were using the same data (the sources were too concentrated on one data source). In the documentation it specifies that validators are able to setup their oracle feeder and data source(s) for decentralized pricing, but that events like this enable validators to know something is wrong in the pricing and to reconsider their fallback priority order (as part of decentralized pricing). There are other security implication issues (apart from this one) that are good to keep in mind too, such as too many validators using the same public LCD to submit oracle votes over verses varied LCDs or a private LCD (if someone spams the public LCD and no faithful validators are using a different LCD, this can prevent successful oracle voting - for instance). In addition, the oracle price-server could use some TLC in regards to a review to determine if the oracle price-server can be updated to be smarter in determining when one price feed to the price-server is wildly off from other sources in the fallback order, for a particular denomination, and make a determination as to the correct pricing (which can still be error prone, but prioritizing errors in data over correct pricing in a complete market crash seems reasonable, since the errors in data are much more common than a complete market crash - this, or other solutions, could be researched to determine if this type of solution is appropriate or not).

For some reading and research on the current oracle design and process, and the Market module itself:

I hope that helps a little bit more (from my previous comment).

I hope you have a great day today :slight_smile:


I thought this problem was solved a long time ago. After first time. It’s totally s…t, it down the trust for system whole. Close those swaps!

This is not seigniorage…. It’s a whole different concept

Evgeny, it was explained very thouroughly by A.E.

How do you still not understand?

Are you charging a small or medium investor?

Because he didn’t understand a detailed explanation
Sorry but you didn’t understand how to value an ecosystem.

It seems that little understands it here. It’s a fact.

More years will pass and the path will always be downhill, this starts with the next expense of the community pool.

You know what he didn’t understand…

because we’re going to have the community pool at zero and we don’t have anyone working on the assets to at least make them healthy, so that they can quickly return to performing their function and generating value to the ecosystem again

Do you have an answer for that?

Do you know how much we’ve spent since the accident, if we include Q2 that L1 is proposing? :clown_face:

:eye: :eye:

You make no sense with your dribble about ecosystem and impending doom of depleting CP.
How is this relevant to anything at hand in this current topic?

Who is charging whom?
It’s very simple: Terra stable<>Terra stable swaps got enabled in May of 2022 by Do Kwon/TLF. This has never been resolved.

Your background of playing a clown or your status of an investor doesn’t give a hint about basic education.

You said the right words, “this was never resolved” add to these words the information I reminded you of, the expense we have already made, add the possible expense that we will be able to make to correct this, after the pool reaches zeros, and you will have the answer, how the ecosystem will be valued.

Sorry maybe you’re thinking now we’re just going to be an AI ecosystem.
Should we rename Terra classic?

have a good day. :+1:

:eye: :eye:

You still do not understand.
Terra Luna 1.0 paid the cost, so to speak.
Terra Classic hasn’t paid a cent into it. Not fixing the issue nor doing anything else than making proposals.

Yet, here you are, allegorically hinting on whatever your imagination can muster up and being entitled in your ignorance.
Oracle Pool can never reach zero, by the way.
Swaps means that you trade one native asset for the other. One gets destroyed, the other gets minted.
Can’t go zero. First grade math.

And Ed’s proposed AI side chain has nothing to do with this current hole in the code that allows terra stables to be swapped. It’s nonsense. They aren’t even on the same damn chain, technically speaking.

do you know community pool? :scream:
:rofl: :rofl:

What does community pool have to do with swaps?
You have no clue how any of it works, yes?

Dude, soon a year since Kwon abandoned Classic. Are we going to keep blame him for all OUR problems after crash? ))))) He will answer for everything in court but will L1 be responsible for its work?


Yeah, I asked you about it twice.
Why haven’t you tried to provide a working solution?


For example, I saying since August-September that we need to USTC distribution and swaps. But team (who takes CP) doesn’t want to do it.