The supply growth accelerated naturally due to the falling price.
If you burn 1000 UST when the Luna price is 10$, the algo mints 100 Lunas.
If you burn 1000 UST when the Luna price is 1$, the algo mints 1000 Lunas.
If you burn 1000 UST when the Luna price is 0.01$, the algo mints 100,000 Lunas.
It’s an exponential, i.e. accelerating curve by default. This proposal probably wasn’t implemented during the crash due to the 7 day voting period, but the algo was minting more than enough Luna to exhaust demand and crash its price to zero without it already.
And the crash was inevitable - you simply cannot cash out $18 billion (UST) from a crypto (Luna) with a $20 billion market cap. When it comes to crypto/low liquidity, you have to divide market cap by 10-20 to get how much money you can squeeze out of a coin by selling it all, which in Luna’s case meant $1-2 billion at most. Add LFG’s reserves of $2-3 billion (assuming they really used them) and you get $3-5 billion that you can cash out of UST. Try to cash out this much or more (like people did now) and everything automatically crashes to zero.
It was a badly designed system which allowed the creation of way more UST than it could support in the event of a large scale panic withdrawal like what happened now.
To all those who ask about the implementation of this proposal: the proposal has been implemented but since the market module is disabled, it has not had any effect. See post #572-574,
Bro, the banking industry orchestrated this crash due to the 20% yield for staking UST. It will NEVER come back, because if it does, it will be attacked again.
I still have my UST on Anchor. Should I move them out of the protocol before May 27 to be eligible of the airdrop post-attack or can I leave them on Anchor?
@gs390 The UST remains depegged on the off-chain because the liquidity pools are in oversupply. We cannot fix the community’s misguided mob justice such that every KISS campaign it tries to perform seems to have no effect or gets worse. Strongly recommend you to read Prop 1691. We have a new version of this proposal but the fundamental remains the same. All the steps provided fixes multiple issues happening in the system from developers point of view. Mob justice begs to differ and it continue to flounder. You will try to burn a billion UST and you will still fail. Burning the UST is not the problem. It is how you leverage it to burn. You are going against zero demand. When you burn USTs you are playing into the same foolish decision that Do Kwon committed when firing all $3.5B BTC at once. You may have your heart for the community, but you do not have a viable plan. You do not know what you are doing. Recommend you to stop what you are doing before you cause even more damage, and you have done enough already. Doing exactly nothing and letting the liquidity pools normalize will in fact do more to raise the UST than all your uneducated brutish efforts. Disappointed does not even begin to describe how we feel.
Indeed. What’s needed is (leveraged) assets backing USTC if it is ever to re-peg because without anything to back USTC, no person will value it. But current rates mean there needs to be ~$10B USD worth of value to come in out of thin air to collateralize USTC before any burn/mint mechanism on Terra Classic network can be discussed.
Anyone know where the classic network can get ~$10B?
It doesnt need 10bil USD. It needs LFG to quietly buy up a available UST at bargain basement prices slowly, over a long period of time, until the actual circulation is so small that it can easily have positive price movement from very little action. That in turn will pull in speculators which would give it enough push to allow LFG to publicly announce they plan to support it somehow (ideally with a coalition of supporters offering up a meaningful reserve, which since LFG has been accumulating this whole time is in their best interest).
I suspect Do Kwon and LFG are just trying to abandon UST though, which is highly problematic and will spell doom for both LUNA1 and LUNA2 as the law suits piling up will make it impossible for him to succeed. He can make all that go away if he just commits to actually fixing USTs peg but I haven’t seen any indication that he can or even wants to do that.
Will admit that the fork proposal which included abandoning the algorithmically based stablecoin was a weird move. The idea seems/seemed sound: mint one burn another, maintain the peg. Obviously the algorithm needs/needed improvement, but to abandon it altogether is/was alarming.
One aspect I worry about is improving algorithm if USTC and LUNC remain linked together to maintain peg. Otherwise, whales may eventually re-create what took place over the past 30 days with USTC and LUNC
