That’s a genius plan.Would it be a one-way& one-coin swap?From Ustc to Lunc only.
2 Likes
Awesome idea, well explained and opened for ideas and complementation.
As i’ve said before, the applied math techniques sounds and match very well, but other aspects, like techniques to implement, insert the code in/off chain, and Validators contributing or joining, I leave it open for friends to opine…
A tactic of real value for this purpose, easily supported, congratulations for the explanation and idea, again.
Forwarding for sure into Brazilians communities!
Regards,
@betosampaiolab
1 Like
First of all, thank you for your work. But being not a great specialist in finance, I would like to understand what is the advantage of this approach to the USTC repeg for LUNC holders. If I understand correctly, this proposal implies that billions of Luncs will be minted, the volume of supply will grow by billions and huge pressure will be exerted on the price of Lunc on the exchanges. How will we avoid another death spiral? I would be grateful for clarification for the uninformed like me.
With all due respect to the validators, anything that’s based on the Prisoner’s dilemma (or group variations of it) is doomed to fall prey to exploitation sooner or later. Do Kwon was fond of mentioning optimal game theory outcomes, so if there’s a path here that rewards dishonesty you can be sure someone will take it - it’s inevitable. The only question is how long it’ll take… and considering we’re playing with a $1B asset here (the blockchain), I don’t think it’s a good idea to risk it all on the foibles of human nature. 
Also as the author states, messing with the Oracle pool is something that shouldn’t be undertaken lightly.
Having said all that, I do like how much thought went into this writeup and I hope we can develop the idea further… maybe if there’s a way to plug the exploitation holes so to speak, this could be further grown into a viable strategy? Since this proposal is still in the germinal stage, I don’t think it’s fair to judge it through the binary lens of YES/NO support (or lack thereof) that we usually apply to props here on Agora. Ergo, I hope the comments section will soon fill with feedback and perhaps even ideas on how to further develop the approach outlined in the OP; I look forward to reading everyone’s replies!
Shalom! 
11 Likes
Thank you for the good advice. Reading this suggestion, I could see how much you’ve been researched about.
This proposal fits well mathematically, but in conclusion, it is a proposal with a set time limit. And the Oracle pool is inevitably depleted.
However, I think It is a great proposal If It has some modifications.
The first part that needs to be modified is where to provide 1% ARB?
Oracle pools are still rapidly decreasing today. If additional free money is provided in this situation, the lifespan of the LUNC chain will decrease rapidly.
I think I can find the answer by referring to the alliance of TFL.
There is a way to get 1% ARB benefits from a third pool where you want to promote your chain using the LUNC chain, not LUNC or USTC.
Let me give you an example. The altar that issued the exam coin is a chain listed on the cosmos ecosystem but not recognized by people.
They want to expose to many users and increase Coin’s TVL while paying for their promotions.
Then they create a separate Reward Pool and link it to the Terra Classic chain.
When the USTC-LUNC pair transaction is traded at $200, the user will receive an additional $2 ARB in EXAM coins.
But most users will want to immediately dispose of the $2 exam coin they received.
Therefore, the compensated EXAM coin must be automatically staked, and a minimum of 21 days of undelegated period must be granted.
Through this procedure, the EXAM coin altar that participated in the promotion can inform users of its coins at a low promotional cost and increase TVL.
Alternatively, you might consider handing over a portion of the LUNC-USTC tax revenue from this relationship to the EXAM Coin Foundation. Because this architecture can clearly improve the face value of LUNC and USTC in the future, and they can be compensated for a significant portion of their promotion expenses.
Algorithmic rotation trading is already a failed model. TFL learned the concept of alliance through the collapse of the Terra Classic, and we will also have to work with other chains to avoid repeating the same mistake.
3 Likes
Good idea Duncan…BRAVO 
you have our support, let’s do this
3 Likes
I know we’ve discussed this but I’ll post it up here too so the community can weigh up the pros vs the cons.
It’s difficult to model this as its such a different idea and I’m not sure what dataset you could apply. So to test I try to exploit the system. As an attacker I buy USTC, send USTC to chain, swap into LUNC, sell LUNC for a profit. Rinse, Repeat.
What this is doing is driving up the demand and price for USTC and also drives the liquidity onchain. But as a result it greatly increases sell pressure on LUNC. Driving down the LUNC price and driving all the LUNC off chain.
When USTC is at peg, you then could increase LUNC demand by reversing the rate but until then LUNC would take a hit.
The next thing is the LUNC has to come from somewhere to swap into. If it’s minted - LUNC price gets driven down. If it’s through LP, why would someone swap their LUNC at a loss, when they can send it off chain and get more.
It is a very interesting idea and very different from what’s out there, I just personally think we would need to address those issues I raised.
5 Likes
If LUNC is minted because of your proposal, then I am most opposed to this proposal.
3 Likes
Thank you sir, We need to have discussions with this idea whether is really feasible or not…
1 Like
read this pre crash article and you will understand why. Its not about making ustc holders rich.
We need to come back, but with mechanism that will prevent a death spiral.
2 Likes
I know how Luna worked before the crash. My comment is on the same cons as Redline’s.
This proposal attempts to adjust our chain’s swap ratio dynamically in reaction to the market.
I believe a less complicated approach would be to set our swap ratio where we choose and let the market adjust to the peg we set. There should be plenty of arb opportunities (creating tax revenue) this way.
If the hard peg is incrementally increased there would be an influx of tax revenue as the market corrects to each peg change.
1 Like
I think the biggest reason for the Luna crash is because it consists of two coins. Physically and mathematically, the multiple of 3 is the most stable structure. The two of single structures are easily collapsed by external impacts. It’s not just a field of study, it’s easy to check in your daily life.
If you want to repeg USTC with an algorithmic structure, you need to add another coin other than LUNC/USTC. It could be LUNA or it could be a completely different third-party chain.
1 Like
Smart proposal. What do you think about Market Maker Module? We can start real ustc burns.
This proposal attempts to adjust our chain’s swap ratio dynamically in reaction to the market.
I believe a less complicated approach would be to set our swap ratio where we choose and let the market adjust to the peg we set. There should be plenty of arb opportunities (creating tax revenue) this way.
This is ultimately the crux of the discussion. How do we incentivize engaging with the Terra <> Luna arbitrage mechanism no matter what the price is?
The only issue I see with the peg-setting is that it’s the same thing as what I describe, except we commit the Prevote to be a fixed rate. How do we ensure that all validators are honest, as @RabbiJebediah mentioned? One option is to slash any validators that don’t report the exact price, but this strikes me as totalitarian-by-code.
We could set the price of any Terra denom to “some fixed value” but I think this defeats the purpose. This becomes even more true as you solve Terra <> Terra swaps, as any number of foreign exchange currencies (including things like Bitcoin, Ethereum, etc – things we could eventually support with the integration of THORChain) will effectively be a double-floating rate.
This also means solving the double-floating rate problem can integrate well with Mirror, and effectively opens up brokering to the wider public from a “sovereign” perspective – I will no longer need my brokerage to “approve” that I can handle options contracts, since any double-floating CPMM swaps are like options (something Robinhood is selling to retail, anyways).
With all due respect to the validators, anything that’s based on the Prisoner’s dilemma (or group variations of it) is doomed to fall prey to exploitation sooner or later. Do Kwon was fond of mentioning optimal game theory outcomes, so if there’s a path here that rewards dishonesty you can be sure someone will take it - it’s inevitable. The only question is how long it’ll take… and considering we’re playing with a $1B asset here (the blockchain), I don’t think it’s a good idea to risk it all on the foibles of human nature.
This is the exact problem with this particular proposal. However, I wonder if we can extend the functionality proposed to the broader community somehow. Externalizing Prevote / Vote feeds to an oracle runs multiple types of dependency risks. Would it be feasible for community members running a peer node to feed exchange rates programmatically using immutable code (i.e. a contract)? This is something I could potentially integrate with Onyx machines, and is a similar setup to Binance’s Full/Witness schema and perhaps we could take inspiration from the concept of SegWit on the Bitcoin network.
In that sense, any type of attempts at Oracle manipulation from the active set validator level is now a prisoner’s dilemma between the active set and the “community nodes” which are running these oracle feeds in tandem. However, this idea could potentially scale the throughput of foreign exchange trading which requires lightning-fast latency time.
3 Likes
Is it your idea or something that was negotiated with @Thorchain.BULL? Sounds like a “conflict of interest” in the context of his commentaries on community DEX and the way he voted on it.
1 Like
No. Any arguments or proposals like this are made with the assumption that the system is permissionless (which, as far as I know, is permissionless, and open-source).
I use THORSwap to bridge between Cosmos and Ethereum, mostly. I also provide liquidity on the ATOM side. It’s quite cool. Reduces the need for routing through CEXs.
1 Like
Well structured plan of action using a flexible rate to compute the applicable premium or discount in view of stabilizing peg of USTC…
Your ideas may make sense if you resolve Number of first
Circulating 9.803.126.667 USTC which year only 82.286 Wallet …
And if you want to put all the hypercognited Coins back in order and remove them from the market, you do two things…The Number of WLUNC and WUSTC Tokens is Burned in Native BEP-20 Format (BSC) the real Holders of the WLUNC and WUSTC Tokens exchange the 1/1 tokens with the new LUNC and USTC TOKENS in BEP-20 format in a short time the Circulatory of all the Cognati Tokens is reduced. And you would have a Real Circulatory of USTC based on the Wallets…All this would be Legitimate because everything what’s more it’s a protocol error and it was never sold
After yes you can tell me about a USTC Repeg but it must be under guaranteed by Gold and by Stablecoin USDT,USDC,BUSD.PAXG.
I follow your Developments…Sorry if I used Translator
1 Like