[Proposal] Restore UST to Peg, Decouple the Elastic Supply and Forge HEROes

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. :full_moon:

Restoring the Peg

To restore the peg we’ll need to ensure three things:

  1. 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. :stop_sign:
  2. UST migrates back to Terra - We need to consolidate all the UST back to the home chain to effectively mitigate arbitrage. :bank:
  3. 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. :dollar:

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 :eyes: 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:

  1. Restart the community fund
  2. Create Luna liquidity
  3. ???

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:

  1. Governance voting power for the new community fund that is generated by the ABC fees
  2. Redeemable for other voting tokens once the network restarts ANC/MIR/???
  3. Staked for Luna Rewards somewhere down the road (post bear market)
  4. ???

Users eligible for HERO Tokens (name pending) would be:

  1. Those who send funds to the ABC (After $1 peg is reached, more HERO is minted for those who contribute past this point.)
  2. Users who migrate UST back to Terra via Wormhole
  3. 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. :vulcan_salute:


Ty for this.


I vote for this since it’s the only proposal I’ve read here that doesn’t advocate stealing money. The other proposals involve arbitrary snapshots which is essentially theft, by confiscating money from a market that was not frozen like it should have been. UST needs to be restored as it currently stands, no snapshots. If sellers wish to re-acquire UST they’ve sold, they can do so now and help support the re-peg, instead of waiting around for a double-dip handout that comes from stolen money from those that supported the peg.


This proposal really makes sense, bravo!


I totally agree. You have made very good point, same as in my posting.

There should be more members thinking like you.

Well done mate.


well thought, fingers crossed do Kwon sees this


I think the DO Kwon proposal has little to no chance of succeeding. I would be happy with 30 cents on the dollar at this point for my UST. Your plan seems better.


When param party?


Hi Saveus, you and all investors will get more than 30 cents on your ust. We just have to wait. In my 50 years i have seen this always happen on stocks. Already now on binance ust is trading 0.214. Its only been 3 days from bottom 0.5 cents. Give it a few weeks it will move above 0.50 cents. After that it will start chasing 0.80 cents and above.

There is saying, if you give a sword to a monkey, think what he is going to do? For answer see google, what happened to the king (The Foolish Monkey And The King).

Agree. Do Kwon needs to step down. He is a blight on the project at this point.


I agree he needs to move aside.

Investors dont forget and forgive.

Once a thief always a thief. That is a stigma they have to live with.

See google what happened to Bernie Madoff, Nick Leeson from Barring Bank fraud. Both were in jail and ended there. I am hearing the same is gonna happen this time, and it just takes one extradition arrest warrant from Interpol which i heard already being considered to catch them. There is no place to hide.

History tells us such people dont go well in their life after what they did to others and destroyed so many peoples life. The power of blessing is strong, but the power of curse is even stronger. People who are destroyed their curses, pain, cries, suicides…

In Buddhism it is rightly said Karma will always make them suffer, and they carry that burden throughout the lifetime which also affects families.

Hi please take a look to my proposal as it is related to yours, we can fix this together

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great proposal!

What elements of our proposals are compatible?

I think both have great points but our biggest obstacle is visibility. We need more eyeballs on this post and comments!

I would love some support on this tweet:

I would massively support this.

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would the recent update with the current reserve funds change this proposal?