It can’t be understated the huge losses everyone has incurred in the last couple of days. This has been a historic event in crypto and I won’t spend too many words reiterating what many of you have already expressed.
I have experience in many different areas of tokenomics, token launches and DAOs and I’ve spent a considerable amount of time thinking how to salvage this beautiful ecosystem that was created. I’ve been a faithful LUNAtic and strong believer in UST and the high-quality products that Terra has launched over the last ~1.5 years.
Saving Face and Moving Forward
I have read @dokwon 's post to Revive Terra, this definitely has been the worst idea I’ve read so far. If you don’t fix your broken product and launch a new one, promising to compensate a mere pittance of what everyone has lost, you can be sure as hell not a soul will trust you on whatever your next venture will be.
The path forward is to restore the UST peg and to redefine the Luna token’s relationship in the ecosystem. 
Restoring the Peg
To restore the peg we’ll need to ensure three things:
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The Network remains off - we cannot fix this mid-flight with bots, speculators and malicious actors trying to game the system while we’re mid-process of revamping it.
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UST migrates back to Terra - We need to consolidate all the UST back to the home chain to effectively mitigate arbitrage.
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We establish non-volatile collateral for UST - USD is the tried and true, but we can open it up to other assets that can be relied upon to hold the USD peg.
To begin this process we’ll need to make a collective effort to recollateralize the token, UST needs to be re-collateralized by the community at large. Effectively we can launch a buy-in only Augmented Bonding Curve (ABC) to allow “investors” to mint UST with upside only, since we know it can only go up, and cannot be sold until it hits $1 and we choose to turn the network back on. Accepted collateral can be whitelisted assets (DAI, USDC, BTC, ETH, SOL, FRAX) that are liquidated to USD or other non-volatile assets upon receipt and used to prop the UST price.
I’m sure we can expect entities such as LFG, Terra Community Fund and some core team members 
to contribute a good chunk of funding.
Using the entry fee mechanic of the Augmented Bonding Curve we can create a new pool of funds which we can use for a variety of mechanics including:
- Restart the community fund
- Create Luna liquidity
- ???
We’ll also need to consolidate all the errant UST out in the ecosystem. For this mechanism we’ll need to leverage Wormhole to allow UST to be bridged back to Terra, with no fees.
Decoupling Luna from UST
To be frank many alarm bells have been rang over the elastic supply mechanism of UST and Luna. Most people have acknowledged at this point that we’ll need to re-think this system. Based on the posts I’ve read and my experience in other blockchains we should restructure Luna to be it’s own standalone token with it’s own liquidity that is unattached to UST.
We all took a gamble with Luna, it was a speculative asset with many ups and down, starting from scratch with liquidity seems like a logical and least contentious starting point. UST is the priority since the fundamental expectation was that UST would be worth $1, giving it priotity over Luna in terms of price.
Luna will serve as the one and only token for validating and staking in the system and will continue to provide solid APR for those who participate in the validation process. This will continue to serve a functional purpose in the system and still give a token for speculators to play with and can provide a signal of the ecosystem’s success from the financial statistics of Luna.
A Reputation Token for Heroes
To create stronger game incentives for participating in this initiative I would also propose we spin up a reputation token (no financial value) to acknowledge those who participate in this rescue mission. This token could have many future possibilites including:
- Governance voting power for the new community fund that is generated by the ABC fees
- Redeemable for other voting tokens once the network restarts ANC/MIR/???
- Staked for Luna Rewards somewhere down the road (post bear market)
- ???
Users eligible for HERO Tokens (name pending) would be:
- Those who send funds to the ABC (After $1 peg is reached, more HERO is minted for those who contribute past this point.)
- Users who migrate UST back to Terra via Wormhole
- Users who bought UST or Luna during depeg event (minus what they sold during the event)
In sum, launching a new system will not give anyone confidence in your name or brand. To truly build confidence back you need to restore the promises you made, keeping UST at peg. Remain communicative and allow time for people to recover from the shock and trickle back into Terra. Only once all of the above conditions are met and we iron out any kinks or corner issues can the network come back online and allow for a true revival of the Terra ecosystem.
Together, we can create a better Terra for all the BUIDLERS, HODLERS, HEROES and LUNAtics out there. 