Luna Classic: The Resurrection as a Bitcoin-based key currency
Hong Gildong
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1.Bitcoin spirit
In 2009, Bitcoin was born amid a crisis caused by the centralized financial system represented by the financial crisis called the subprime crisis. Now, 14 years after Satoshi Nakamoto created Bitcoin, cryptocurrencies are making remarkable progress, and Bitcoin contains the following spirit.
Decentralization: The decentralized nature of Bitcoin is a cornerstone of the Bitcoin ethos. The community believes that decentralization is key to ensuring the security and integrity of the Bitcoin network as it eliminates the need for intermediaries and central authorities.
Freedom: The Bitcoin community values individual freedom and autonomy and believes that Bitcoin can provide a means for individuals to have greater control over their financial lives without government or corporate interference.
Privacy: The anonymous nature of Bitcoin can provide a degree of anonymity not present in traditional financial systems.
Innovation: Bitcoin values innovation and creativity, constantly pushing the boundaries of what is possible with technology. This is leading to the development of a wide range of new tools, applications and use cases for Bitcoin.
Community: Finally, the Bitcoin ethos is characterized by a strong sense of community and shared purpose, and seeks to solve the problems of the traditional financial system.
Bitcoin is taking its place as digital gold, but it is showing limitations as to whether it can dramatically help overcome the current financial crisis and economic recession that has come since its birth. This is because Bitcoin alone cannot create a sufficiently liquid flow of capital, and we would like to insist on the need for a stable coin that serves as a new key currency using Bitcoin.
2.Necessity of currency, necessity of key currency
The reason countries print currencies is simple. It is because it is easy to fulfill the government’s financial obligations necessary for the people to live. Printing money also sometimes acts as a monetary policy that stimulates economic growth. As such, many countries have their own currencies, but standards for facilitating mutual exchange are needed, and accordingly, there is a key currency represented by the dollar, a currency that guarantees the stability of international trade. And in order for a country’s currency to become a key currency, it usually meets the following conditions.
Economic size and stability: A country with a large and stable economy and financial system is more likely to adopt its own currency as a reserve currency.
Volume: Currencies used a lot in international trade are likely to become key currencies.
Political and military influence: Countries with significant political and military power often adopt a currency as a key currency to reflect their global influence.
Trust: A currency that appears reliable and stable is more likely to be adopted as a key currency because it provides a safe and secure means to settle international transactions.
However, there is one problem with national-based key currencies. It implies the premise that the key currency country must develop stably forever. In fact, this is close to impossible, and a key currency based on Bitcoin is needed for smooth international relations and common prosperity of mankind.
3.The importance of stablecoins
A stablecoin is a cryptocurrency designed to maintain a stable value, usually pegged to an asset such as a country’s currency. In addition to price stability, cryptocurrency has the following advantages.
Efficiency: Stablecoins eliminate the need for intermediaries such as banks and payment processors, allowing them to be used for faster, cheaper and more efficient cross-border transactions.
Decentralization: Like traditional cryptocurrencies, stablecoins are often decentralized and not controlled by a single entity or government, making them highly resistant to censorship and government intervention.
Interoperability: Stablecoins can be used to facilitate transactions between different cryptocurrency networks, thus improving interoperability and integration between different blockchain ecosystems.
Because of this advantage, several stablecoins have existed so far. DeFi was able to grow through stable coins, driving the explosive growth of the entire cryptocurrency industry. However, the indiscriminate issuance of stable coins and the risk of de-pegging are the hurdles of cryptocurrency growth. In fact, the risk of defegging comes from a lack of trust. If we create a stable coin (lunc) that serves as a key currency by adding another trust on top of the trust of Bitcoin, the stability of stable coins pegged to currencies of various countries will naturally be guaranteed.
4.Why Luna classic(Lunc)
In May 2022, Terra(UST), which was pegged to $1, and Luna, which collateralized it, collapsed and have not recovered to this day. Because of this, many companies in the cryptocurrency market went bankrupt, and many investors also had a hard time. Cryptocurrency had a brilliant future to carry, but such a great ordeal created distrust from many people. However, seemingly impossible events such as Luna’s resurrection have the power to turn this distrust into true faith and trust.
Humanity is formed by establishing numerous relationships, and in modern society, these relationships are often achieved through the movement of money. As an extension of this point of view, cryptocurrency is not simply a means to make a lot of money, but a container for human relationships and an invention that can contain human, very human values. The revival of Luna as a Bitcoin-based key currency will be a milestone in human development.
5.Method
- It is important to reduce Luna’s circulation. Make 21 million tokens(ticker: Sbk, token that support
bitcoin-based key currency) and sell at 1sbk = 300,000 lunc. The obtained lunc is stored in a wallet that does not move. - If all 21 million tokens are sold, the circulation of lunc will decrease by 6.3 trillion, and in the process, the price of lunc will rise.
- Organize a foundation that has 6.3 trillion lunc and utilize the lunc to secure the required amount of btc.
- After a series of processes, when the prices of btc and lunc are stable, declare that the value will be fixed at 1btc = α lunc through the foundation.
- Based on 1btc = α lunc, if the price of lunc rises excessively, the foundation sells lunc to increase the amount of btc holdings, and if the price of lunc falls excessively, it buys lunc with the btc it has to maintain the lunc’s price stably.
- The utilization plan of Sbk(token that support bitcoin-based key currency) is as follows.
- The foundation’s voting rights are determined by the ratio of Sbk it has.
- If you stake Sbk to the foundation, you can receive btc at a certain rate.
- If Sbk is not sold out for a certain period (6 months, subject to change), 1Sbk can be exchanged for 300,000 lunc.
6.Conclusion
Bitcoin was born to overcome the economic crisis caused by the centralized financial system, but another innovation must be accompanied to actually overcome it. The resurrection of lunc as a Bitcoin-based key currency will forever be recorded as a milestone in human development through faith. Sometimes simple beliefs create the strongest networks.