Burning is key to help restore UST back to peg. But some people can’t wait, and they need their money now for various things. Pay those people back using USDC.
We all know this is in flames right now, but it may be possible to get it sorta back to normal. Unless a whale bails us all out, there’s nothing else to do.
Let’s recap what’s been going on with LFG. 2 weeks ago, there was 3 billion in LFG, now there’s 190m. Let’s just say the money didn’t go to good use. So we’re working with 190m right? Wrong, since 99.37M of that is UST, which you can’t just dump that since it’s your own coin. We’re actually working with a number more like 90.63M.
Currently there are aprx 100m of UST in LFG and 1 billion in community pool. There’s 11.28B in circulation, which means there’s ~10b which needs to be bought back. First step, liquidate the LFG pool. It’s needed to restore the peg and payback. Burn like ~500m of UST and try to buyback more UST at a few cents more per with 45M, aka 50% of LFG pool, which panic sellers can get out at a better deal. Then use like half of the 90M, so 45M, to buy USDC and try to make a deal with circle? I doubt that’s possible but moving on. Pay back UST holders up to a certain limit, sorta FatMan style but new people will not qualify, like people that bought the dip since if all goes to plan, it will bounce back. Burn the bought back UST which should be alot if they buyback at 20c, aka like the current price of UST. Peg should be almost restored to normal. If not, it would naturally bounce back up.
Result? UST should bounce back to normal, and people that aren’t firm believers get USDC, the preferred currency. The rest of UST holders can wait till it hits the $1 USD mark.
Problem: may be that there isn’t enough $ to buyback enough UST to burn enough. Then get a loan big boi Do Kwan. You caused this you gotta solve this, or you can try to fundraise using one of the other ways on some of the proposals.