Around 10b UST and 6600b luna out in market. Introduce a mechanism similar to Anchor for those 10b+ ust holders to get guaranteed $1 value return, however after a fixed locking period.
Depending on the urgency to withdraw UST to Dollar one can pay exit tax.
1 week locking period to get back $1 might incur exit tax of 20%
2 weeks locking priod to get back $1 can incur exit tax of 15%
and so on.
Also consider adding inflation tax on txn fee. All taxes to be collected in luna alone.
All the luna earned via exit tax can be burned and certain percentage of inflation tax can also be burned.
mint & burn can not be used till Luna market cap is higher than ust supply.
This way there will be buying pressure on luna and a guarantee for ust holders on what is agreed.
Once all UST is reimbursed then you can start issuing new UST only when you have non volatile collateral to back it up. You can limit UST supply till you have collateral. Your BTC or other crypto assets should grow atleast 2x+ to be even considered as collateral.
Buying from open market and burning will not work nor does a hard fork. When trust is gone the moment you fork and open up everyone will try to exit and again ust and luna will crash.
I am not sure something similar is already considered or not. Just posting here to get visibility on this and see if something like this can be done. Details on locking period and taxes you guys are better positioned to decide. If this sounds a good idea request experts to refine and develop this further.
I think Terra folks are smart and they can easily develop this further.
To revive Terra the team has to give a clear path forward. Trust can be brought with clear and regular communication.
Most of the people are not caring of yield as of now. They just want their $1 back and a hope for Luna to grow even if its takes time. They can simply take out all ust supply, come with a better strategy and can slowly start issuing limited ust which has collateral backing. With limited supply ust demand becomes high, then they can again link it to largest luna holders getting a pie of it. That way Terra can balance things well.
Slow and steady the ecosystem can be built all again and even more stronger than it was.
I think halting is not needed. If the trading is there there might be arbitrageurs who wants to buy cheap and lock it for a longer period to get better returns. That way those buyers will help suck those ust out faster.