Lunc Strategy

General
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Hello all, I intend to provide some insights about general picture.
I try to make as simple as possible for saving time. If you have questions about logic behind it feel free to ask.

First of all, the current value of the blockchain is coming from the speculative traders, some trust from community, and blockchain which was developed in the first place. The main utility of the blockchain was the algorithmic stable coin, and bunch of protocols build around them. So if you all agree on this, LUNC communities main goal is to re-structure the stable coin algorithm and protect the peg. All the other noise is irrelevent. All the other protocols start working once the peg is strong.

So let’s think about the fundamentals:
Value of the US dollar is never on our hands, that’s issued by central banks and controlled by them, the only reason we peg USTC is that peoples assumtion of stability toward USD. In long run, USD looses value because of inflations, 5-7%(sometimes even higher) year. Which means we should keep the value in other means, like GOLD, BTC.

Yes before crash Luna had reserves in BTC, but its value towards USD flactuated high, and it made us vulnarable. And main reason was the reserves were centralized and cotrolled by few people.

What I suggest:

  1. We should stop burning immidietly, and send all USTC transaction fee toward reserves to protec the peg. And gradually buy BTC as we can’t keep value on LUNC.
  2. No burning, burning is literally paying dividend to current holders, which LUNC community can not effort now.
  3. After we bring some value to USTC, retail interest flactuates market a lot and sell pressure too. This plays good for transaction fee earnings of the community. I would suggest slight increase to transaction fee 0.5% maybe.
  4. Minting USTC will be same by buring LUNC, which brings value to LUNC, and we use this to buy luquidity (BTC) and automate the process. I mean entering new money into system, will be easy but exit liquidity we provide will be taxed. Community keeps the value of transaction fee of exit and inside transactions too to protect peg. Most transaction occur inside the ecosystem, just like in CEX do. But our advantage is it is not controlled money.

Other protocols start working which helps to lock more coins.
Bad debt eventually bought or locked (locked which gives us more time)

PS: English is not my native language, ask if you did not get the logic
Also, let me know if all these technically possible?

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Main idea is to use the utility value of blockchain to start the reserves and automate the liquidity!

1 Like
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things don’t work like that. For USTC to peg again, real money must be injected. It cannot be born from nothing. What should be done is to burn a certain amount of USTC, gradually creating a reserve that serves as a backup. Although the mechanism of burning lunc and mining USTC is not bad, it can be taken down by someone with a lot of money and bad intentions. I would not recommend using it again unless limits are set and certain security mechanisms are used.

On the other hand, there is a huge inflation of Lunc which is not going to allow its value to rise much

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We have many ways to restore the ustc peg, but any method is icing on the cake. The only problem is how to destroy ustc. I believe all institutions are waiting and watching, because to save terra, restore 1ust:1💲 needs at least 20b US dollars, but Even if the anchor is restored, how can we ensure that they make a profit or get out of it unscathed? This is a problem of the century!
So the transaction tax appeared! They only have limited funds, how to continue to squeeze luna/ust investors or recover some losses? Through false good news, overdraft terra’s life, short-term price increase to manipulate the market, and finally make a profit and get out! Only losers will be left on terra!