Set the withdrawal limit and anti-run measures like a bank, so that ustc is linked to 1 US dollar. If there is no run event, ust will run successfully and stably, and the stock will stop trading if it rises or falls over a certain percentage. In the real world, there are Supervision, the bank and the stock market will run stably, so the algorithm is used to supervise ustc to make ustc more intelligent, so that it is pegged to USD 1. The anti-run measures are as follows. When ustc>0.95, there is no transaction fee for lunc, and when 0.95>ustc>0.1 When there is a transaction fee for lunc, and 50% of the transaction fee will automatically destroy ustc on the chain, when ustc<0.1, an additional arbitrage fee will be charged for each exchange of ustc to lunc, and these fees are used to destroy ustc
I think it will be easily attackable.
On the contrary, I don’t think so, the reason why the terra network was attacked is because the destruction speed of ust can’t keep up with the running speed, it is perfect only if the destruction speed of ust can keep up
I mean this 50 % transaction fees doesn´t look enough for me. But i think this would be great to make as prevent for destabilization. I see 100 % of tx fees to be used. When we will start loosing peg again. Why not use all taxes to not make it happen again? This should be true when USTC == 0,95 USD or less. Price must be true some time before this is used.
Second depeg prevent i see something like swap site. You cant loose more then 0,2 bucks for 1 USD. Means you can always swap through smart contract your USTC for 0,8 bucks of reserve assets. (btw sorry for my english)
I suggest to forget the past, concetratre the forces within the present situation, why not to peg it as it is? look at my proposal at Why not peg USTC at 0.01 cents?
I agree with you on setting anti-run measures during unstable moments. Heavy taxation could be useful but can also stagnate the economy. It doesn’t really solve the trust issue on ustc, because with high fees retailers won’t enjoy the ecosystem anymore, so they’ll stop using dapps and maybe d-ump lunc anyhow.
I opened a topic about whales regulation that can be blended with your suggestion. Can you give a though?
The arbitrage mechanism of ustc will make the terra network prosperous. When ustc reaches 1 USD, the LUNC burning mode will also be automatically turned on, and the value of LUNC will also increase. Anti-run is only in special circumstances, which is rare.
The only way to restore confidence is to overcollateralize using a high-cap coin like BTC… it is possible to do it, especially nowadays with USTC at a very low cap
Stabilize ustc to a penny, not just for lunc or ustc, but for cryptocurrencies as a whole, your idea makes cryptocurrencies untrustworthy, people stop believing in virtual coins
The numbers are only personal suggestions, and the specific parameters should be subject to strict mathematical simulation calculations.
we need to reduce ust supply and currently lunc market cap is too low so we can’t repeg it. we need to to burn and lock ust
Arbitrage mechanisms must be constrained. Forward arbitrage is beneficial to both values, but the essence of transition expansion is more like stepping on your feet to lift yourself up. Reverse arbitrage is more dangerous, and will inevitably lead to infinite inflation arbitrage and stampede, and eventually both of them zero. Therefore, there must be constraints, there must be emergency reserves, and in extreme cases, there must be a pause button similar to the limit down to allow appropriate time to adjust. The specific operation requires experts in the field of economics to conduct detailed and in-depth research and formulate rules, and then do extreme tests before considering implementation.
I would really REALLY encourage new LUNC members to familiarize themselves with the purpose and capability of the Terra1 mechanisms. Proposals like this don’t make any sense and show really poor community understanding of a complicated protocol. You guys need to understand what you own.
The utility of LUNC/USTC/the mint-and-burn market is not to have USTC at 1, LUNC to moon, etc. The real world utility of LUNC/USTC has nothing to do with LUNC’s value.
The mint and burn market is a flawed but fixable mechanism for the protocol to keep itself in balance. It requires a free market in order to do its job. “Burn USTC at a peg of 1 USTC = XXX LUNC” is not a free market mechanism, so it will not work. It’s like saying “The Uber app is great but let’s set the taxi price to $.01 per driver-mile.” No drivers would show up and Uber’s platform liquidity would dry up.
Similarly, mint and burn depends on balancing the supply of USTC with demand for LUNC and vice versa. It will be a long and volatile process. Central price fixing will not help the process. The point of mint and burn now is to clean up the USTC oversupply at a fair (market) rate.
At current relative market caps, the protocol can easily equitize its bad debt with only 20-25% further inflation. Once the bad debt is equitized in a non hyperinflationary manner and a decentralized BTC/DAI reserve is set up, the protocol will be back in business and everybody will make great ROIs on any LUNC that they bought around these levels.
But price-fixing the mint/burn will not help.
I agree with you. While the 2 tokens are connected, their individual values have nothing to do with each other. The $1 USD value for USTC is a set value, and all transactions are based from that value, not of LUNC value.
No, you are wrong. The reason why LUNC has its current market value is inseparable from USTC. Separating them will only make them fail. I see that many air coins have a set of rough development roadmaps. You are the same kind of person as them？
Im not sure what you are refering to?
The comment you responded to was about how USTC value is based on $1USD not the value of LUNC.
Secondly they have already been separated plus on top of that the relationship has also been halted. USTC is not a governance token, while LUNC is and looks to be moving forward with becoming a DAO like token.
The value of LUNC is well beyond the stablecoin USTC.
You missed my point.
As another poster already said, the two tokens’ value is inseparable. If LUNC abandons its obligations & abandons its algostable, it becomes another vaporware blockchain.
The LUNC mint/burn process exists so that the protocol can recapitalize itself at market rates for both USTC and LUNC. If you arbitrarily say that “USTC can only be recapitalized [brought sustainably closer to its peg] at a price of $.01 or less” you are guaranteeing that the market will not clear, which will cause the recapitalization process to fail.
There is no reason to arbitrarily bring USTC to $1. That would just cause a tsunami of sell orders for USTC, since there is nothing backing USTC (as its market cap shot up from $100M to $10B). You have to get people to burn USTC at the market rate and give them equity in the future, in exchange (LUNC). That’s the only way to retire bad debt and make the system solvent again.
USTC trading at $.007 is an opportunity for the protocol. It allows USTC to be retired without causing significant further dilution to LUNC holders.
No and I am not even disagreeing.
Im not saying this at all. I said that theoretically has already happened by TFL. The Algorythmic system is one of the most impressive pieces of the ecosystem and I am certainly not advocating to abandon that unlike many orhers here.
This is true but under the current environment the mint to burn process will not work or at least with the intended reaults.
I am also not saying that. Now IS the time to burn USTC at these rates I have said that all over. I would go further and speed that up with a collataralized loan of $X and with USTC purchased burn 70% to 80% and hold the rest as collateral for the loan AND backing up the remaining USTC.
i don’t think were in disagreement much if at all but just expressing the same results differently.
You seem to know a lot about it and should be in charge of doing it. It has to be fool proof though. I’m sure that if Terra UST was to hit a $1 peg again the SEC is going to take a good look at it. It can’t fail again. That would be a total disaster for the Terra community.
I think it would work at a dime peg, $.10 with less risk. It could be used like DOGE and SHIB to buy things.
Could not agree more, check out my proposal… USTC almost naturally pegged at 0.01 USD