[Prop 1691] Terra v2.2: A Fair 11-point Confidence Restoration Plan for the Terra Enterprise

[ERG]

Summary

We present a confidence restoration plan that aims to rebuild with what we have rather than reset and disproportionately favoring any particular people in the process.

Disclosures: We own both LUNAv1 and USTv1.

Who we are: We are the 1 Terra Community, that includes you. We believe the existing Terra community is more than the sum of its parts. Help us lead with purpose to save our 1 Terra Community.

Telegram Chats
Twitter Announcements

Highest Priority Threats

Prop 1623: Terra Builders Alliance: Rebirth Terra Network [source]

Recommendation: NO

Reason

TFA+TBA Terra v2 abandons money, redistributes assets, and cancels debt. The 376.70M LUNAs are disproportionately blocking the 6.5T LUNAs from staking to vote. We, the customers and investors, have been cut from their community.

Proposal

Prop 1691: A Complete Confidence Restoration Plan (NO FORKING) [source]

Status

• 5/19 12:14am EDT Voting remains suppressed; no one can actually see nor vote for this proposal while the clock runs out
• 5/18 10:42pm EDT Submitted for voting with full 50 LUNA deposit

Priority 1 Proposal Seeking a Vote

In this confidence restoration proposal, and given the little reserves LFG has left and low interests from new investors, our summarized ask is for the community to vote for:

1. Eliminate the broken minting model between LUNAv1 and USTv1 in the market module and let the free market trade as is;
2. Limit the authorized shares LUNAv2 mintable to 5% of the total supply in circulation to keep any Whale (strategists like David Tepper) from immediately seizing the project and liquidating it for its remaining value, and to give time to evaluate whether authorizing additional LUNAv2 in circulation is beneficial to LUNAv2’s value;
3. Allow minting USTv2 only from 1:1 bonded stablecoins with any fungible amounts redeemable from the LFG Reserves;
4. Create a recovery fund and restructure all USTv1 debts into long-term unsecured bonds that pays out (in USTv2) the $1 par value of the USTv1 plus 30% of the debt’s par value in LUNAv2, and for protection, this contract cannot be modified by general LUNAv2 voting governance and must have a supermajority (66%) vote by the bond holders, and the bond is to be immediately paid in full upon any change of control;
5. Create a network insurance fund that consists of USTv2 and additional assets and stablecoins for future stabilization of LUNAv2 and USTv2 market prices;
6. Raise 0.1% tax with a 47/47/5/1% distribution to the recovery fund, LUNAv1 burns, network stabilization fund, and TFL and community operations respectively;
7. All interests and staking are to be paid in USTv2;
8. Reduce Anchor Protocol’s savings program to 3.5% to increase sustainability;
9. Allocate $50M from the LFG Reserves remaining for buying stablecoins to collateralize 50M USTv2 to seed the market with some liquidity;
10. Allocate the remaining funds ~$37.9M for the governance to pay TFL operating expenses and any community projects on a case by case basis;
11. Fix the Terra v1 to incorporate these requests, or if Terra v2 forking is truly necessary to accommodate the changes, then fork as follows: (1) keep minting disabled on Terra v1; (2) announce to central exchanges (CEX) on the upgrade; (3) freeze the networks; (4) clone Terra v1 circulations into the Terra v2 network where LUNAv1 converts to LUNAv2 and USTv1 converts to recovery bonds; (5) have external auditors give the approval with reports published; (6) resume Terra v2 and decommission Terra v1; and (7) announce to CEX.

This enterprise has a narrow window of opportunity to succeed. Running the numbers, there is enough money left to bootstrap this plan without excessively rewriting the distributions as pushed by the executive management.

Annotations

• For #4, there is no guarantee the new enterprise will survive. After Chapter 11’s, the debtees usually collect 100% of the project. Instead demanding for 9.5/90.5% ownership which would disproportionately impact the existing community, showing in good faith with the community, we propose the USTv1 ownership of the enterprise could be reduced to 30% par value of the debt and are given unsecured bonds to receive debt repayment from taxes over time. The bonds would work like aUST at an individual account level where taxes paid increases the redeemable amount over the lifetime of the bond, and after paid in full the taxation is to be redistributed as per #5 minus the recovery fund. After burning all LUNAv1 and USTv1 from the LFG Reserves and applying the conversion above, then the overall effect of the LUNAv2 ownership structure becomes 29.6% to LUNAv1 holders and 70.4% to USTv1 holders. The reason for giving the USTv1 the LUNAv2 ownerships at all is because there are no guarantees that the recovery payment would ever be paid in full nor would there be any guarantees that by the time the bond is paid in full that the cash value compared to TIPS (Treasury Inflation-Protected Securities) would not be valued at -30% after 10 years. Note: We make no distinctions between any token within the Terra network. bLUNA unbonded is LUNA. aUST unbonded is UST, wLUNA unwrapped is LUNA. wUST unwrapped is UST. The wrapped mechanism does not matter. It matters that LUNAv1 and USTv1 holders are valued properly to claim LUNAv2.
  

  

• For #6, is done this way so that when the executive team is successful at driving up value that the amount of funding made to LFG for paying TFL operations and spending on lofty projects could be achieved. LFG governance represented by the new owners to adjust compensations, grants, and loans to various projects.

• For #9, assuming a $50M collateralization because Anchor Savings currently has a 44.6M UST total borrow. At today’s $0.1242 it’s only worth $5.6M. Collateralizing $50M to mint 50M USTv2 gives the new environment some liquidity for the LFG Reserves to sell USTv2 currency once bonds repeg to USTv2 which will be at $1.00.
  

  
  
  $50M should be converted to bonded USDC and USDT. The new bonding instrument should allow fungible redemption from the LFG Reserves.
  
  

• For #10, with the remaining ~$37.9M value should allow a nice 2-5 year runway for operations assuming management can exercise good capital controls and no senior executives are to be paid >$175k/yr salaries. We cannot afford them until receiving new investment capital. Lofty Terra projects would have to wait. Have to simply concentrate on the best projects that enables the greatest tax recovery.

• For #11, airdrops trigger taxable events in the US. Let us not consider this option until we separately discuss a better plan. It does not make sense to punish everyone for holding massively fallen LUNAv1 and USTv1 coins and then be punished again with taxes for the new airdropped USTv2 tokens after a massive loss. This is an anti-shareholder option and has not been well thought through.

Motivation

Mechanics

We acknowledge that money cannot remain stable under an undercollateralized algorithmic stablecoin.

A fundamental law of economics dictates that a demand is necessary to allow value to go up when the supply goes down.

When fear catches on, the demand for USTv1 falls which negatively affects LUNAv1 in a feedback loop that makes LUNAv1 mint and drop USTv1’s value even more.

Using falling Bitcoin (BTC) assets to stabilize USTv1 causes further lowering of confidence that a repeg would happen without additional collateralizations added. Fundamentally BTC is not a stable asset. It behaves like stock equities rather than commodities. BTC’s market value currently drops along with the US equities market.

Bonding currencies to stablecoins and bonding stablecoins to mint USTv2 offers a way to keep (semi) DeFi and is the most practical way to achieve the primary utility (demand) of the Terra platform.

Utility

The community believes in Terra’s enterprise for 2 reasons:

1. Terra promises low fees and no limits to transfer money (there are extremely few banks that offer low fees and no limits);

2. Terra promises an ecosystem for savings and loans.

Reasons for Abandoning TFL’s Proposals

Ulterior Motives Under the Present Leadership

Money must remain stable for it be useful and a platform that does not have any capital controls to collateralize and stabilize its value becomes a con game.

Poor Leadership Character

There is poor leadership skills on display with no actual empathy nor desire to make right what went wrong for so many, and had already claimed several lives. No responsible leader hides for days. We expected PR with the community 6 times a day and continued promise to make things right. Take help. Form representative bodies to get through to the community. A closed war room provides nothing but a large echo chamber.

On May 13, 2022 Do Kwon writes:

[source]

On May 15, 2022 Will Chen (@stablechen), a former TerraForm Labs developer last year who now works for Terran.One validator, writes:

[source]

Being heartbroken is not the same as apologizing. Hiding behind legalese and giving up the moral high ground stirs up invitations for more attacks, and it will lead to harming the community no matter which product is finally used to restore ecosystem.

Better understanding Do Kwon’s character flaw helps us understand his theory of leadership, his values, and how he will ultimately respond or react to challenges.

A False Assumption of Demand

May 11, 2022 Do Kwon did not show an understanding that fear, whether manufactured or not, is a fact of life in the markets, and fear often drives down demand which leads to the UST never pegging.

The redemption capacity worked to slow down minting LUNAs by significantly increasing the spreads after the max redemption was reached. Had the market module been disabled earlier it would have helped fixed the problem because it acts like a short-circuit breaker. Typical markets would have regained some level sanity after 4 days even without doing anything. Allowing the minting to increase was pouring water on burning oil. It is not the purpose of the reserves to defend the peg at all costs. The reserves are used for decelerating sell-offs but once momentum overcame the resistance the depeg needed to happen and the reserves needed to wait for buying back cheap debt.

The end effect of leadership’s performance resulted in hyperinflating the circulated LUNA supply to 6.5T tokens and the UST has still not regained its peg.

[source]

There is no point to support a Terra v2 fork that has the same demand risk profile as Terra v1.

Subversive Follow-on Behaviors

There is no need to wait for @terra_money to perform analysis in order to understand what went wrong with the network.

[source]

The team and co-conspirators do not want everyone to actually digest the full post-mortem report by pressuring the community to accept a half-baked plan starting within 2 days. Do Kwon’s reverse Robinhood forking proposals maximally benefits his VCs (i.e. #hashed validators) to recover faster.

Published 5/13 [The Terra Ecosystem Revival Plan 1]

(Terra Ecosystem Revival Plan)

Published 5/16 Vote on 5/18 The Terra Ecosystem Revival Plan 2

No Representations With Defaulted Debt

The Terra v1 infamously advertises itself as money first (“a decentralized economy needs decentralized money”). Everywhere you see Terra you see references to money. The smoke is darkening leading towards a legal fire.

We have made it abundantly clear that all advertisements about Terra UST and others instruments being called money puts Do Kwon, his company, and co-conspirators into a new class of legal liabilities, and they are on the hook to repay the debts owed.

The agreement between LUNAv1 holding validators was not inclusive of all LUNAv1 and USTv1 holders. When money is in default, the remaining assets must be liquidate between all stakeholders in the enterprise to provide equitable representation in governance. When in default, the existing governance is no longer in control and must not be in control as their priority changes from a fiduciary responsibility to asset recovery for their strongest supporters.

Do Kwon’s strongest in-house council begins resigning to avoid getting dragged into multiple domestic and international wire fraud cases that everyone knows is coming.

Terraform Labs’ legal team resigns after UST collapse

The Inescapable Nexus of Debt Obligations

Terran.One Validator Nexus

On May 15, 2022, Will Chen (@stablechen) writes:

[source]

On May 17, 2022

[source]

Do Kwon Nexus

Justifying to escaping the nexus of debt obligations is not that easy. On May 16, 2022 Do Kwon sought advice on how to provide airdrops to debtees based on snapshots. The intention and the action of seeking advice establishes the nexus that Terra v2 is indeed a derivative or a fork of Terra v1’s value and hence the benefits drawn by Terra v2 entirely belong to the community owners of Terra v1.

[source]

Terra v2 was designed with the intention of carrying over Terra v1 from Do Kwon’s proposed Terra Ecosystem Revival Plan and Terra Ecosystem Revival Plan 2 with new ownership redistributions.

Discussions should have been about addressing the problems of Terra v1 instead of pressuring everyone to agree to new ownerships in Terra v2 and disregarding debt from Terra v1. The team had given up realizing they themselves were incapable of saving everyone and their backers, and chose rebooting the project for a third time.

Criminal Charges Will Begin Mounting

“A Victim in Singapore Accuses Do Kwon of Running a P-o-n-z-i. The victim claims that over 1000 people have been left holding mud”
https://archive.today/2dfLs

Legislative Pressures Coming

Additional pressure is coming after the entire DeFi community beyond Do Kwon and his Terra. The DeFi community must be fully motivated to fix the problems the right way, even when Do Kwon does not accept help, because this responsibility is unfair to ask an inexperienced young gentleman to handle.

South Korea’s reaction

South Korean Legislator Calls for Do Kwon to Appear before National Assembly

South Korea Launches 'Emergency' Investigation Into Collapse of LUNA and UST...

US’s reaction

US Treasury Secretary Janet Yellen pushes for stablecoin regulation by end of...

Community Oppositions

Almost 90% of the community rejects Do Kwon’s proposals. Do Kwon’s character will be further tested to see if he is really committed to the community’s will, or whether he will opt to run away from his own problems. He could still repair his damaged image and brand by working for the community, or he can follow through to save his friends and give up his integrity. The outcome is simple for everyone outside the TFL war room.

Terra’s Fork-Recovery Plan Invites Huge Opposition, Will This Adversely...

Conclusion

We have outlined what the basic problem was and proposed a solution that would restore confidence. We may actually need Do Kwon removed from leadership if he remains persistent on finally wrecking more lives.

Previous Revisions

The previous proposal revisions are provided for transparency and discussions.

Proposal v2.1

Terra v1 is closest modeled after the traditional tried and true savings and loans enterprise. The savings and loans model works with some adaptations needed in Terra v2. Here is a 10-point genesis plan to kickstart the Terra v2 with value.

1. USTv2 must be eventually fully collateralized (i.e. bonded USDC), but initially at Terra v2 genesis it needs to be partially collateralized (i.e. FRAX). The only method of minting USTv2 should be by bonding foreign stablecoins. Bonding external stablecoins to average peg to the USD provides a practical method to achieve decentralization.

2. LUNAv2 is a variable-valued asset who’s value should approximate the market value of the total unlocked value (TUV) + the total near-term interests earning from the total locked value (TLV). LUNAv2’s value increases as the TLV increases and falls as the TLV decreases. This instrument becomes no different than how banks and financial institutions buy mortgages and discounted distressed assets.

3. Terra v1 minting ends. No more Robinhood pegging. When USTv2 depegs, LUNAv2 depegs. Property values are relative to its country’s currency. This eliminates aggravating an already stressed economy as it should.

4. Terra v2 shall integrate automatic market makers (AMMs) to trade USTv2 and LUNAv2 on a curve so that they are valued like traditional crypto assets and stablecoins on the market that is driven by supply and demand pressures. The convenience of having both on-chain for trading is still immensely convenient to users. The market module, Terraswap, and Astroport have been very convenient.

5. A network insurance fund to absorb LUNAv2 shocks during times of dramatic liquidations to help reduce any shocks and aftershocks that could lower the demand for USTv2. Since USTv2 will eventually be fully collateralized and LUNAv2 helps drive some USTv2 demand that arbitrageurs are expected to fix the price of USTv2 off-chain.

6. Add a 0.05 to 0.1% network tax fee. The distributions will be 47% towards fully collateralizing the USTv2; 47% to buy back LUNAv2 to help drive up its value over time assuming the daily market volume remains high–this is specifically to help assist LUNAv1; 5% towards the network insurance fund; and 1% towards paying for community projects such as paying TFL to continue operations. The tax and redistributions to be revisited monthly to help react ahead of macro government monetary policies (i.e. US Federal Reserve interest rate hikes).

7. Reduce the USTv1 debt by asking enough community members to help take unsecured LUNAv2 bonds with considerations for tiered (favorable) interest rates, with increasing lock up periods (remains out of circulation), and staggering the size of bonds. Avoid a mass exodus of unsecured debt all at once. 7, 14, 30, 60, 90 days, 6 months, and 1-4 years. Staging unlocks help control contractions in the LUNAv2 economy.

8. Apply similar lock up periods for Anchor Savings. 7, 14, 30, 60, 90 days, 6 months, and 1-4 years. Staging unlocks help control contractions in the USTv2 economy. Reducing interest rates to 3-5% APY would help reduce the debt burdens and help sustain the market.

9. Add additional strength to the enterprise from new LUNAv2 investments with a 4 year lock up (locked at current price) specifically to help accelerate towards a 1:1 bonded foreign stablecoins to USTv2 collateralization, and partially to periodically buy up LUNAv1 supply to drive up its value and benefit those USTv1 holders who take the unsecured LUNAv2 bonds (locked at current price).

10. Any remaining USTv1 reserves could be sparingly used for controlled burns with the condition that the rest of the plan is in place, otherwise uncontrolled burns under a broken system provides limited leverage before the entire system collapses permanently. Any remaining BTC reserves must be switched to bonded foreign stablecoins so that USTv2 can start becoming collateralized (ref. #1). In this enterprise the baseline value is the UST but generating interests comes from LUNAs. Without value in the currency the interests from loans are worthless.

@EverlastDD

[Colby_Jack]

This is well thought out and the kind of thinking that is needed to save the platform. As hard as it is we need to step past the emotions of everything that was lost over the last few days. Try and learn from those losses in order to make the platform stronger, less vulnerable, thus more viable long term. If we can do that we may see value return to our investment.

[ERG]

In this proposal nobody is getting the short stick. Everyone keeps what they have and concentration is on addressing the broken minting mechanism with a few features to increase demand and burn the LUNAs. The decision to fix the network in-place or create a new network does not matter. The share allocations do not get reset or modified as we rebuild and repair the damage.

[ERG]

There is a narrow window of opportunity left. The longer @Do Kwon waits to work with the community to rebuild value, the more class action suits are coming.

Ask for forgiveness, ask the community for unsecured bonds to reduce the UST debt load.

These unsecured bonds will have 1 power. A significant number of these unsecured bond holders will find it unacceptable to sell any less than what the UST is worth on the open market. This creates a volume pressure to move up the price. Moving about half the UST to the securities side allows you breathing room to rebuild to $1.00 on the open market.

The alternative with the likes of FatMan and others are fake. These entities try to sell the community with hopium. When you are down there is only 1 action you can take. Go back to your roots and create new value.

LFG bailed out all the big holders with 80,000 btc

52k btc sold for 1.5b ust https://twitter.com/LFG_org/status/1526126708193054721?s=20&t=v9EANSWQ0xZX80tCbz3Vcg 33k btc sold for 1.1b ust https://twitter.com/LFG_org/status/1526126713062576128?s=20&t=v9EANSWQ0xZX80tCbz3Vcg all executed through otc to their buddies at close to $1 for each ust

[ERG]

Constructive Support

Any plan that restores capital value focuses primarily on building value and secondarily on distributions

JUST IN: LFG Reserve 300BTC Only!

I told you so before but I received only insults… There is no other way out than either hoping for outside help or do the fork and focus on rebuilding the blockchain/ecosystem such that v2 has a value and gets one day listed on exchanges. There is no cash to compensate anyone unless funds step in like a charity…

Burning LUNA Concept

The burning LUNA concept applies network taxes on transactions to reduce the LUNA supply

[Proposal] BURN and REMEDY fee with each LUNA transaction [PART I]

UPDATE: "What you are going to read here is first part of the proposal. If something new will be added by the community to the proposal you will find the continuation in @bloodcurdle thread → [Proposal] BURN and REMEDY fee with each LUNA transaction [PART II] message → [Proposal] BURN and REMEDY fee with each LUNA transaction [PART I] - #2322 by bloodcurdle Please contnue with both threads to keep views going !" @Hellothere: “The proposal belongs to everyone here. I just sit down yesterd…

UST Collateralization Concept

The UST collateralization concept restores value in the UST by building up actual substance to restore the peg

Rebuying UST with 1B worth of BTC without fixing the algo is like directly burning 1B worth of BTC

Luna holders are to decide if they want to trash the 1B fund as CZ irresponsibly suggest. A collateral fund is not there to rebuy a chain with a bug. You are planning to sell the BTC Dip. Buy! Make the fund stronger as a reserve for ust2. The chain as it is, turned worthless. A fork is necessary New Coin must have the LFG fund as a collateral. Buying and not selling the Dips!! On the market tops, borrow dollars as a collateral and use them to buy more BTC on the dips. As a regular investment…

Pay Off Small Debts and Rebuild Concept

The @Colby_Jack (wlawyer) concept focuses on rebuilding the network with new capital investments but hinges on being able to pay off the majority of old debts (the people that need to pay rent this month)

The Sanest Compromise - Combining the Terra Ecosystem Revival Plan and the FatMan Plan

Hi everyone. I am wassielawyer - the guy who posted 'A Sensible Decision-making Framework. Since I made this post, I have had many people reach out to me, including some incredibly helpful members of the Terra builders group, UST holders, LUNA holders etc to share views on what the future of the Terra ecosystem might look like. Having considered the leading proposals on this forum, I have put together what I consider to be a sane compromise for all parties. Disclaimer Firstly - a long discla…

Liquidate the Properties Concept

The @Deathstar_Daddy concept begins by liquidating LUNAs back to USTs at 1:1 then apply network taxes that burn USTs to drive up its value (a subset of the 9-point recovery plan), but the Robinhood minting process between LUNA and UST must be eliminated which is central the current Terra v1’s downfall

New UST/LUNAC Revival plan & Leadership Bid

Updated! This is just a summary as otherwise it would be too long as well as to protect my bid to lead the LUNA Classic team, as giving away certain trade secrets would allow someone else to take my plan. As stated I intend to make a bid to Lead LUNAC & UST moving forward (post fork). This is my plan which can be accomplished without Forking our community. But unfortunently Do Kwon is set to do that. So like what happened to Coke, the Classic shall be victorious. (Though seriously I hope both…

Destructive Support (Recommend: NO)

Any plan that takes away value focuses primarily on distributions or redistributions so that holders accept a permanent loss of capital

Do Kwon Concept

5/13 The Do Kwon concept arbitrarily resets debt obligations to reboot the network by ignoring commercial fraud aspect of eliminating debt obligations by offering UST debt holders 40% of a new token

Terra Ecosystem Revival Plan

There’s been several community and validator groups discussing launching a fork of the Terra chain to make the ecosystem whole from the UST depegging event. Wanted to offer my perspective on how this should be done. As of this time, there are still several billion dollars worth of UST, and the value of Luna token has fallen to essentially zero. Even if the peg were to eventually restore after the last marginal buyers and sellers have capitulated, the holders of Luna have so severely been liquid…

5/16 Do Kwon is now pressuring the community to take his illegal investment plan within 2 days (5/18) and ignoring his UST debt obligations by reducing from 40% to 25% (the equities cannot be rewound back and they must be valued at liquidating all LUNA and moving them completely to UST side)

Terra Ecosystem Revival Plan 2 [UPDATED AND FINAL]

This will be a living document to coordinate the new network launch with the community. Details are subject to change. This document has been edited in conjunction with input from the Terra Builders Alliance, and has endorsement of both the TBA and TFL. Motivation While UST has been the central narrative of Terra’s growth story over the last year, the distribution of UST has led to the development of one of the strongest developer ecosystems in crypto. The Terra ecosystem and its community a…

FatMan Concept

The FatMan concept promises distributing remaining assets, assuming there are any value left, in stages to allow smaller fish to jump ship first

There are $87M million left. Do Kwon and TBA co-conspirators are pulling their weight to push and vote for their debt voiding plan, enrich themselves, and drain the remaining LFG Reserves to pay their salaries and bonuses without offering anything back to the community. They are not trying to save Terra v1. We can put the remaining assets towards the best value building projects or rollover and get almost nothing voting. If you are not a whale then it is nearly guaranteed you will get nothing. There is over $13B in debt with only $87M and people want to be made whole how?

[Proposal] Tier repayment 1:1 USDC refund - Incorporating Fatman's Idea - Potential Mechanics (Not Currently Enough Funds)

Unless a white knight or angel investor comes forward, there isn’t enough money to enact this proposal. At current prices, you have ~$243M between Binance, Justin Sun, and the remaining LFG reserves, which is a fraction of the $1B - $1.5B. What if you did a lock drop for all UST on chain, and everyone who deposits UST can get 1 USDC either paid by donations from anyone wishing to step forward, or a percentage of future transaction fees, which would be sold for USDC and distributed to users. Thi…

False Debt Settling Concept

The false debt settling concept assumes UST holders will be settled so that TFL will be allowed to work on rebuilding LUNA without any debt obligations

Fixing LUNA is the KEY

Now that the LFG (Luna Foundation Guard), has made it public, that there’s very little funds left from it’s reserve, and from their updates, would prefer to compensate UST holders only, starting with the poorest wallets, is ok by me. However, The Project team should know, that right now, majority of the UST holders are no longer interested in sticking with the project. This means once they get their compensations, they will feel lucky and excited to flee the system. LUNA holders on the other ha…

Economic Refactoring Concept

The economic refactoring concept starts by pegging the LUNA and allows the UST to depeg then as UST minted supply reaches the circulation cap the UST repegs; for this concept to work the LUNA and UST must be traded and not minted between each other otherwise the net effect is saving the LUNA and destroying the UST

[Proposal] 8 Steps to Save Luna Now - Economic Refactoring Proposal From Industry Professionals

Proposal Link on TerraStation → (Terra Station) Summary We are the team behind 2 other CMC 500 projects and happen to believe our strength is in the field of economics. We’ve monitored the event unfold and recorded numerous metrics that showcase the problem that caused the spiral downfall. I myself have experience with economic architecture and algorithmic trading. This is a proposal for Economic restructuring, which shouldn’t be too difficult from a technical standpoint. We as members of the…

UST Derivatives Concept

The UST derivatives concept arbitrarily defines mortgage contracts as gold so save the LUNA and magically eliminate the UST debt obligations

[andrew1084]

It is a good post to solve everything.

[vanise]

@ERG

Any plan that restores capital value focuses primarily on building value and secondarily on distributions

Thank you for centralizing the proposals, lets draw a master-plan that could be voted ERG

[fili_buster]

Great plan, we like it!

[Diego24]

Lol. Nothing will come from this chain. It will not even get listed on centralized exchanges.

[ERG]

@ERG

• LUNAv2 is a variable-valued asset who’s value should approximate the market value of the total unlocked value (TUV) + the total near-term interests earning from the total locked value (TLV). LUNAv2’s value increases as the TLV increases and falls as the TLV decreases. This instrument becomes no different than how banks and financial institutions buy mortgages and discounted distressed assets.
• Terra v1 minting ends. No more Robinhood pegging. When USTv2 depegs, LUNAv2 depegs. Property values are relative to its country’s currency. This eliminates aggravating an already stressed economy as it should.
• Terra v2 shall integrate automatic market makers (AMMs) to trade USTv2 and LUNAv2 on a curve so that they are valued like traditional crypto assets and stablecoins on the market that is driven by supply and demand pressures. The convenience of having both on-chain for trading is still immensely convenient to users. The market module, Terraswap, and Astroport have been very convenient.

The highest priority is implementing steps 1, 3, and 6 because the current minting algorithm is broken. For example, hypothetically assuming 100% of the UST holders were begrudgingly willing to trade for new unsecured bonds with a lock up period, fix the market module’s exchange rate to $1 LUNA:1 UST, and each new UST minted must now be bonded (collateralized) debt. Bootstrap the UST side with some collateralized debt so that the loans enterprise can start borrowing. Perhaps seed the network with $50M in collateralized USTs since that is about the current size of the Anchor savings protocol. The unsecured bond holders would eventually be paid in full assuming TFL and the community does a good job increasing money transmissions and the utility of the savings and loan enterprise.

Note: Alternative to the unsecured bond with lock up is no lock up with conditions. As the network transactions collect taxes, 47% of the proceeds are fractionally collected from the bonded stablecoins to recover up to the total value of the unsecured bonds plus the interest, that anyone who want to cash out for less than the total value of their unsecured bonds can exit for pennies on the dollar.

• [min(total value of the recovery fund, total recovery fund collected) - amount claimed] / # unsecured bonds remaining = present value per bond claimable

with the remainder of the total liability redistributed to the remaining holders. The interest could be at 20-50% for the trouble. This strategy would reward long holders and slow down the de-collateralization rate of the people that want completely out.

For step 8, there is a current proposal for the Anchor savings to reduce to 3.5%. This rate is fine.

5% of the network transaction tax should be shored up by the LFG Reserves to buy up USTs to defend the peg. However a more interesting use of this fund could be to employed for market maker bots in CEX to provide liquidity and tame the prices of UST and LUNA so that they can be more predictable.

7, 9-10 are secondary. Even if no one agrees to invest new capital, no one wants to move out from UST to unsecured bonds, and there is no money left in the LFG Reserves, what we have is still the savings and loan enterprise. The debt reduction just helps to accelerate the process.

What happens between now and when the implementation is complete. Allow the open market to continue trading. Under no circumstance reverse stock split the LUNA on anyone. The taxes on daily volume will burn down excess LUNA over time. When the network is ready, to then establish a date and time of the unsecured bond sales to remove as much uncollateralized UST debt from the system as possible to strengthen the value of the UST.

[ERG]

Everyone must reject Do Kwon’s proposal 2 which we strongly recommend all to reject.

According to Do Kwon’s own math, 25+55% = 80% of 64T belongs to UST holders.

If we instead liquidate all USTs to LUNAs to start fresh, then the total supply of LUNA will be about 64T and the total combined value is about $2.6B. Currently there are 6.5B LUNA in circulation. The existing LUNA holders represent 10.1% of the network and UST holders represent 89.8%.

We can do it the hard way, or we can ask the community to willingly moved to unsecured bonds to reduce the uncollateralized debt, and do things the right way. Do Kwon has stopped all minting so it is currently impossible to vote against his decisions. Do Kwon is redefining what money means and will face international wire fraud charges. Do not let him ruin himself and the community.

[Uebock]

Good topic. Sadly dontkwon doesn’t read anything, lol.

[Drg_Ggvg]

hello,here is my suggestions about a burning mechanism to LUNA

[Proposal] - speed up the burning by launch multi-person online collaborative painting activities(like reddit's r/place) regularly and cast the result of each painting activities as an nft

drgg62086/luna/blob/main/README.md

All it takes is to attract enough people to participate in painting activities and attract a large number of current luna owners to bid for the NFT, and Luna can be burning in a short period of time,Without incurring too much external cost

and these features are not complicated and should be developed quickly,

by the way,if you think this is a good ideal, please retweet it and let community developers to see it,or let Do Kwon or CZ see it(my twitter was blocked),or Initiate a vote if you can,thanks

[Thommo]

Why are people not talking or looking at this solution to fix UST and drive value back into LUNA and remove the inflationary numbers. The algorithmic errors of the systema are the problem. This needs more looking at.

[empireyoncar]

Creo que el equipo El equipo de Luna incluyendo a Do Kwon, deberian acatar, Escuchar La Propuesta de Fatman, Primo, El no se ha pronunciado, solo Ignorado todo lo que la Comunidad Piensa, y Sencillamente, Hacer la Propuesta de Fatman Primero, Luego, El proyecto de Hacer un Nueva Terra Luna v2, sera Posible, Incluyendo Solo Haciendo NFT a para Apoyar el siguiente Proyecto, Y teniendo En cuenta, que Esta comunidad, Estan Fuerte Como la de BITCOIN, Y ellos se estan dando el lujo de perderla,
Hay mucha Gente Mala En youtube, e Informacion, COn la Propuesta de fatman, arreglan la credibilidad, confianza, y haran algo altamente considerado, y van a tener la comunidad para siempre, no hablo de 1 personas sino, millones, incluyo luego pensar en un rescate de empresas, pero urgente es la comunidad.

Excelente proyecto Bien pensado!, pero la Comunidad, Quiere la propuesta de fatman primero.

[ERG]

Constructive Support

Burning UST Concept

The burning UST concept aims to reduce the debt burden by looking for whales to invest money, however in distressed markets the whales prefer buying assets near free rather than investing money in an enterprise where their capital is used to pay down debt and will not grow for some time

[Proposal] A Better Way Forward™ => Bail out UST by burning 11B excess, then buyback LUNA. NO FORK

Summary Right the wrongs caused by de-peggening, give a realistic path to recovery for Terra without a hard-fork. Motivation Originally a response to this post: The Sanest Compromise - Combining the Terra Ecosystem Revival Plan and the FatMan Plan - #100 by wellhat Proposal TLDR I have been envisioning a better path for Terra going forward: New mandates for TFL / LFG: Terra chain V1 has to live on, i.e. the current active state right now must not be deprecated, no hard forks . Anything …

[ERG]

Destructive Support (Recommend: NO)

TerraBuildersAlliance Concept

The TerraBuildersAlliance concept reallocates Do Kwon’s Revival Plan 2 shares to community developers and almost completely disregards the existing debt obligations to LUNAv1 and USTv1 holders

TerraBuildersAlliance distributions:

Do Kwon’s Revival 2 distributions:

LUNA Go Forward Proposal

This document has been endorsement by both the TBA and TFL. Motivation While UST has been the central narrative of Terra’s growth story over the last year, the distribution of UST has led to the development of one of the strongest developer ecosystems in crypto. The Terra ecosystem and its community are worth preserving. Terra’s app ecosystem contains hundreds of developers working on everything from defi to fungible labor markets, state-of-the-art infrastructure and community experience Te…

[ERG]

Constructive Support

Native Stablecoin Concept

The native stablecoin concept emphasizes that without a partially or fully collateralized stablecoin that the Terra platform is no different than the thousands of useless crypto coins

Terra 2.0 MUST HAVE native STABLECOIN

Summary Most of the people, including myself and another $ 14 billion, had entered land thanks to Anchor and native stablecoins. If Terra 2.0 wants to live, it must improve the only thing that made it unique and different from other chains: the stablecoins. In this proposal I would like to discuss the real reason why Terra was created and how we could solve its fall. This proposal will be constantly changing, as I am not an expert, I call ** ALL DEVELOPERS WHO WANT TO MAKE TERRA GREAT AGAIN *…

[ERG]

Constructive Support

Compensate UST/aUST First Concept

The compensate UST/aUST first concept acknowledges that any redefinition of money debt is a crime and that would halt the project so senior debts must be paid first to save the project

@tl.tl:
The key assumption is that Do Kwon and team have the capital to pay senior debt. We do not believe the organization has much capital left.

The first order of any default is a change of control from executive management to a bankruptcy trustee who acts as a fiduciary for the existing shareholders. This would in effect restore the voting rights of the UST holders as none of the $13B or so people are able to vote against any actions that goes against their best interests. The benefit of putting all LUNAv1 and USTv1 to vote is that they can actually vote on a debt reduction plan because at the moment it is unlikely that anyone will receive any money back. This is in effect debtors defaulting and the bank agreeing to a write off with conditions.

We were disappointed that Do Kwon failed to reach out to the community to acknowledge his error and work with the community to salvage what is left. Not everyone holding USTv1 wants Terra to fail. The idea that money transfers could one day be low cost and unlimited, and loanable is worth saving but not in its current incarnation, nor in any of the reboot proposals from Do Kwon and TerraBuildersAlliance.

The only ulterior motive, unless Do Kwon could provide assurances otherwise, leads the astute to believe the proposals were geared towards rewarding his most loyal VCs and developers. Is not getting paid in cash enough that all employment must now be rewarded with free shares of the enterprise, and is not using bonus money to buy LUNAv2 at low prices not enough? It does not make any sense to us either. It certainly feels like entitlement for free shares without actually risking personal money to support the network, or more subversively, in effect, paying to encourage developers to run PR campaigns on social media.

If Do Kwon goes to jail, then we will discuss with our capital investment partners to seek whether TFL would transfer their IP ownership to us or to a community foundation. The key issue rests with whether the TFL and LFG are willing to accept a change of control for the benefit of the community as we still strongly believe in its potential enterprise value.

UST holders compensation - got to act quickly

I am a Luna holder and believe in no case UST/aUST holders as of May 9th should be discarded by saying Terra is more than UST. It is very important that Do Kwon, TFL, LFG and everybody else involved act quickly, as civil and criminal proceedings already began in Korea and Brazil, other countries are likely to follow soon, including Singapore and the United States. Emotional manipulation that UST holders contributed to collapse of Terra is absolutely unsubstantiated. If Terra was attackable, it…

[tl.tl]

Whether TFL/LFG have money or not - does not matter. Kwon et al under criminal prosecution risk in several countries. New project is unlikely to be successful in such environment. Project founders need to secure funding (personal savings, fundraising, etc).