Summary
The team needs funding from VC’s to bail us out and collateralize our Stable Coins. To get funding you need collateral. You cant keep UST as collateral at this point. The only option is Luna. By diluting the supply we arent helping anyone and this is evident from price action and the amount of Luna that is in circulation is huge.
Motivation
To bail us out - increase the price of Luna and get back to peg
Proposal
You guys know better. But just sharing my thoughts on this. Following are the steps we can follow to tide over this crisis
Stop minting of Luna’s. Stop minting of UST’s.
Come out openly saying we will peg for sure. State that we are in talks with VC’s and they are interested in funding. A tweet from DoKwon would go a long way.
Provide a staking platform in Anchor or on Terra’s own site where users can deposit UST and get 1 full dollar when we reach peg. You can throw additional benefits like a small portion Luna for trusting us.
Since people would love 30%-50% gains on UST demand would be there and they would be willing the stake in your platform.
Buy back Luna’s from the open market using the UST’s we already have in our treasury instead of burning them.
With 250 million dollar worth of UST’s going into the buyback of LUNA, luna price will jump rapidly. Also no more new Luna’s for the time being.
Secure a deal with a VC now pledging Luna’s as collateral as the price Luna would be way higher. You will get very very good funding.
Put that funding into use by Collateralizing UST’s further
Fix all that needs to be fixed. Restart the Minting process.
Absolutely agreed. The best option is to get Credible VCs to buyback all circulating supplied at this cheap price which be a huge value in return for the VCs and stop minting. This will give enough room and time to restructure. However caution has to be taken to ensure that these VCs do not sell until a certain price in phases. I believe we will BOUNCE BACK STRONGER. Let’s keep PRAYING for the entire LUNA Team to succeed.
I do agree there needs to be a death spiral circuit breaker in place which stops minting on both tokens and increases burn rate on both, possibly through increased transaction fees until UST reaches it’s peg threshold.
Any foundation backing the peg should have reserves in UST, not other crypto assets like BTC which can be expected to sell off when they are most needed.
Absolutely agree. Just want to add my two cents here.
There is no point in trying to prop up UST. VC has zero incentive to do so. Imagine if you are a VC with 12B, would you buy up all UST circulating supply, and redeem back your own 12B at $1 later?
Any attempt to support the UST peg now would only lead to more LUNA minting, which would dilute LUNA supply even more and decrease the backing value of UST. Using a 0.05B coin to sustain a 12B peg is just impossible.
Propping up LUNA though, would generate incentives to VC (more on that below). When LUNA’s market value is back on par with UST. Things can be gradually resolved.
We’ve already traded 100x the circulating supply of LUNA on CEX today. I believe a significant portion of those are shorts on margin, therefore I’m proposing the following:
1. Stop conversion of UST and LUNA. It has to be done to control the supply issue.
2. Gather capital from VC and our treasury, secretly buy up a significant proportion on the circulating
LUNA in CEX, then prop up the price of LUNA in an extremely short amount of time.
3. Bonus: Binance will be suspending margin trading on LUNA soon - use it to our advantage! When
the tide suddenly turns and short sellers are forced to cover their position. It would create huge
demand for LUNA.
4. With enough capital and the small LUNA market cap now, we might even create an infinity squeeze
like GME.
5. Meanwhile we should let UST to become free float. Devaluate to whatever it will be. Holders
would hold on and leavers can just leave.
6. With a much larger LUNA and a much smaller UST. Now we can start to resume the peg.
One last thing, I don’t think we should give the VC too much restriction. One reason the DoKwon’s deal fell apart is because it has too much lock up – who knows where your coin would be in 1 year. Instead VC should be allowed to cash out as long as LUNA is above our intended price. After all, VC is all about profit, not technology.
Pure speculation here: I think Justin Sun from Tron would be very interested in this as a VC. He has just launched his stablecoin a while ago and would be dying to assimilate the UST ecosystem, order of magnitude larger than his. Plus he loves this kind of publicity stunts - who doesn’t want to save the whole crypto world? And finally, he has great connection with the CEX to pull off these kinds of coordinated attack on shortsellers.
Agree 100%. LUNA is still attractive if they somehow get us to peg and the value of LUNA should be above 1 USDT. We can definetly attract VC funds and short covering could take us places. Have a query though. Do people who can make a difference read our suggestions we post here? Will it be taken across to the team for consideration? Just asking as in the moment of crisis any small suggestion could trigger a big idea in them.
Hello G_S I think they are reading the various suggestions and taking actions already…Let’s keep praying for GOD’S Wisdom and insight for the Team to succeed.