Summary
Be it Resolved: whether UST & aUST holders, prior to chain restart, shall be given choice to migrate to a UST-only chain before the main LUNA blockchain is restarted?
Motivation
This proposal is based on the idea that anyone who holds UST has a claim against the chain, so it is wrong for the chain validators to freeze their assets. UST holders should be allowed to exit their position in the form of their choice. This attack was made possible in part by the slowness of the mint/burn mechanism of LUNA and UST. Now that the chain has been stopped, we can conduct the required mint/burn all at once at fixed price (effectively at infinite speed relative to chain evolution), then separate the chains.
Proposal
Prior to LUNA chain restart, UST holders will have a choice. For each UST they have, they can either 1) accept a UST on a new sister chain or 2) accept LUNA at equivalent value as of last block, but no LUNA cannot be used to redeem for any stablecoin anymore.
This proposal would occur in phases, with technical feasibility details to be discussed:
Phase 1: Chain stoppage (already complete!)
During this time, a new chain just for the UST is made. The idea being, if the UST holders from the UST chain can raise enough money to form stable liquidity pools with a different algo stablecoin like USDD or DJED, they may have an offramp at closer to peg than at current panic prices.
Phase 2: UST redemption period
Using the last LUNA chain block as our snapshot, for fixed period of time, UST and aUST from LUNA chain can be exchanged appropriately for UST on the new chain. Any UST not exchanged will be transmuted into LUNA at the last block’s on-chain price.
Phase 3: Chain separation and restart
At the end of fixed redemption period, both chains restart independently. LUNA chain no longer has to deal with UST claims because the settlement process has been completed, and can exist as its own crypto, with the staking eventually reenabled. LUNA finds its own price as a PoS asset, with initially high staking returns resulting from the high accumulation of transaction fees in the depegging. Any further compensation to be discussed by new LUNA stakers if/when LUNA market cap recovers enough to be useful.
This is honest brainstorming looking for honest feedback.