If you hold LUNA or UST and have lost a lot of money, then please read the below carefully and if you agree with me make sure to vote on the above proposals and write a comment on this post so it keeps showing up to more people if you believe this proposal is a win-win solution for everyone. Otherwise, please write down what do you think is the best option to reinstate the LUNA and UST values.
Please add your notes on this post so all of us get out of this distressed situation.
xLUNA, the new proposed governance coin, will be minted progressively by burning 20 UST or 63 million LUNA tokens to reduce the pools’ sizes and to re-peg the UST (check the Technical Example section below for the details).
By doing so, both UST and LUNA pools will decrease in size, which will bring their values up again and hopefully people can restore the majority of their initial investments.
- xLUNA will be the new governance token i.e. used to vote, propose, stake, validators etc.
- xLUNA will minted by burning the excess pools of both LUNA and UST.
- In order to make xLUNA worthy and tempting to stabilize the ecosystem again, holders (who decide to burn LUNA and UST and get xLUNA) should be considered as shareholders.
- Do Kwon and TFL should mint the majority of xLUNA, as they are the responsible entities (possibly legally) behind the failing algorithm, by burning the UST and LUNA.
- Dividends should be distributed to the shareholders yearly/quarterly or whenever to reward them for saving the project and the community.
- After regaining the community’s trust, TFL to make sure this situation doesn’t reoccur. This is out of this proposal’s scope.
LUNA - Rewards for UST on-chain/off-chain swapping to retain the peg
UST - the Stable coin
xLUNA - the Governance coin
UST, and other denominations, will be swapped with LUNA to retain the UST’s peg. Also, arbitrageurs can make money and continue to support the ecosystem.
xLUNA will be swapped by either UST or LUNA, in case investors want to be part of the governance process.
After the crash, we saw that Terra Governance was spammed by the low prices of LUNA. Hence, this new governance token is a must.
The below pegged and de-pegged values are just for explanatory reasons. The actual/best values should be thoroughly discussed with the community.
- LUNA(p) = LUNA just before the UST was de-pegged
- LUNA(d) = Price of the LUNA after UST being de-pegged
- UST(p) = UST before it was de-pegged (1 USD)
- UST(d) = Price of the UST after being de-pegged.
- LUNA and UST to be removed from exchanges until the fix is applied. Only withdrawal to Terra Stations is allowed.
the below prices were chosen as an example
1 LUNA(p) = $120
1 LUNA(d) = $0.0000019
1 LUNA(p) worth (120/0.0000019) LUNA(d) which is more than 63 million LUNA(d)
1 UST(p) = $1
1 UST(d) = $0.05
1 UST(p) worth 20 UST(d)
1 xLUNA can be minted by either:
Burning 63M LUNA(d)
Burning 20 UST(d)
Bottom line: By burning the LUNA and UST coins, and minting xLUNA instead, UST and LUNA supply should dramatically decrease and their values increase. Hence, UST will moving towards it peg value again
In regards to the proposed hard- fork solution, I don’t think this will work! Once airdropped, people, I am confident the “ex-believers” who will get the majority of the new coins, will sell their LUNA and UST and crash the system, again!!!
In this case xLUNA goes for the community members who really wants to save the project, specially TFL.
The prices of LUNA and UST stabilizes; specially UST, the main purpose of Terra ecosystem, as it is more tempting to burn 20 UST(d) rather than burning 63 Million LUNA(d) to get a weight in the Governance community.
LUNA Supply at the moment more than T6.5, Market cap more than $1.1B.
UST-LUNA and other denominations on chain swap to resume working.
This proposal can be considered as a draft for a better same-concept proposal.
- Proposal on GitHub - GitHub - 0xab3d/luna-ust-fix-proposal