This does not constitute legal advice
Dear LUNC community, you have most likely heard the recent news of the United States SEC bringing charges against Do Kwon and TFL.
I have read their claim filed in court by the SEC against them, which you can find here at the bottom of the page https://www.sec.gov/news/press-release/2023-32.
The summary is that the SEC is alleging Do Kwon and TFL violated securities law by making LUNA, and UST, and wLUNA and mirror related products.
They further allege Do Kwon and TFL engaged in material f-raud and deception in relation to UST being a “stablecoin”, being used by Chai, a partial de-peg incident which was claimed to be resolved by the strength of the algorithm when the SEC alleges it was a big investor who bailed them out, and other f-raud allegations including of 10,000 BTC on a cold wallet with over $100M so far being withdrawn from Switzerland, and ultimately this f-raud/deception leading to the collapse of LUNA and UST causing billions in damages.
The SEC claims authority to proceed due to numerous employees of TFL having worked in the USA, and offerings made in the USA, among other reasons.
Now basically they have asked the court for judgment seeking these following remedies:
If the SEC is successful this could result in basically a complete financial wipeout of TFL and Do Kwon, and stopping them from dealing with any security. Both Do Kwon and TFL are being charged.
The way they identified what a security is in their claim I think would apply to LUNA V2.
Now what about LUNC (formerly LUNA)? Since LUNC is no longer linked with UST (now USTC), and is not owned or governed by TFL, I believe LUNC will escape from this drama.
However, I don’t believe that will be the case with LUNA V2 which is directly owned and ran by TFL, which by the reasoning given by the SEC, they would almost certainly allege LUNA V2 is a security.
I won’t get into it too much here, but as a Bible believing Christian who receives prophecy from God about LUNC, I received on May 19 a prophetic dream about the new LUNA with the words “Zero” and “Worthless”. However, I have received many dreams about how great LUNC will do. I also received in a dream which I posted on December 13, that Do Kwon will be arrested/attacked.
I share these things because as the LUNC community, we need to take stock of the situation and I believe we should consider strongly the following points:
Put a halt to any USTC re-peg development. The algorithmic peg was heavily targeted by the SEC in their claim, and there is too much legal risk to LUNC if we become pegged to USTC. The simple method for rising USTC is burning the supply (it has 700x less total supply than LUNC), we can all ask Binance to burn their fees like they do for LUNC.
We need to look to funding our own infrastructure with priority. This includes everything we need to be completely independent from TFL if they were to go bankrupt and give us zero support.
We need a suitable funding rate to achieve independence.
Though independent as a blockchain from TFL and LUNA V2, we are presently reliant on their infrastructure, and from Jared_TFL’s estimates from an AMA I listened to, from what I remember, was about $1M in monthly server costs they cover for us (about 6B LUNC worth per month).
They said it could be significantly cheaper but rather was around the costs they were incurring. I don’t know of other cost estimates to run LUNC’s infrastructure at a more cost efficient level.
Basically with the current LUNC community pool funding rate of gas fees only, we are looking at around 6.2-7M gain in LUNC per day (with USTC included) or about 210M per month. With a 50/50 split of 0.2% tax (which is likely to pass), we have about 25M per day so 750M per month. A total combined of around 960M per month.
If we kept the 50/50% split and raised the burn tax to 0.8% (like is being proposed) we would be looking at 0.4% rate for CP, or about 100M per day, 3B per month, with gas 3.21B per month total. These figures are subject to LUNC price and volume changes.
I think we really need to consider a higher funding rate soon, as we may not have the luxury of being able to rely on TFL to pay our infrastructure costs.
This thread is to discuss LUNC’s independence from TFL, what needs to be done to achieve this (I know we have the Rebel Station project which was funded by the community), and how we can reach a suitable funding rate to meet our needs as a chain now and into the future.
While legal proceedings can take time, we should do whatever we can to secure LUNC’s future, as a priority now. I would appreciate your thoughts.
Kind Regards, Christopher.