Summary
A simple and long term restoration plan by gas fee and TRUST restoration.
The gas fee is a “invisible” component of each transaction and will gradually increase UST and LUNA values
The Mathematical restoration will take 40 years, yes, forty years, so no instantaneous Rich and no Magical solution, just hard working.
Note that with TRUST restored, the recover will may take less than 2 years, with Market Cap increase, but it is conjectures. Let’s go to Motivation.
Version
Changes
1.0
Initial version, if positive feedback is received the version 2.0 will be sent to Terra Station
Motivation
UST is more than USD and LUNA(c?) will rise again.
Objectives
Restore UST to 1 USD peg, and continues up to 100.000.000 UST at circulation. (Yep, 1 UST became about 7.8 USD by currently market cap)
Reduce LUNA(c) supply to allow LUNA and UST restoration up to 1.000.000.000 LUNA(c) at circulation. (1 LUNA(c) will became about 1 USD by currently market cap)
LUNA V2 can continue its path without UST relation with Luna.
Advantages
With the current high inflation scenario any deflationary coin will attract investments and holds .
The arbitrage on UST and LUNA will keep the transactions running, as well Luna and UST Projects and its usage .
Validators will received a high increase at its fee and planned gains on long term.
UST holders will restore the value from its loss and if continue it will go over USD: depeg USD
aUST holders will restore the value from its loss and if continue it will go over USD: depeg USD
LUNA holders pre and post attack will all gain as the Market is open and the LUNA value will consistently increase.
Community pool restoration and Project investments.
The change at fee is easy to implement.
The LUNA mint is already stopped.
The USD to UST depeg is already active.
Ok, now let’s go to the Proposal changes.
Proposal
Stop and forbid any LUNA mind. (already done)
Disable USD peg (already done)
Gas fee change from 0.25 UST on UST to 0.25 USD (fiat) and 1.5 LUNA(c) on LUNA(c) to 0.25 USD (fiat).
After the change (3) the Gas fee may be readjusted yearly by United States Inflation Rate from the interval. (This will guarantee consistent value to Validators at long run), another rate may be defined in the future.
Without additional market cap the UST will be restored in 22.48 years at flat rate and LUNA will be as 1 USD in 34.13 years at flat rate.
So why forty years?
As you know as the price of LUNA(c) and the UST raise the Burn rate will slow down and the restoration will decay, but the market cap will grow as well so the Projection is 40 years.
Thanks to: @HelloThere for the BURN and REMEDY fee with each LUNA transaction proposal
do kwon for the immediate new coin Proposal @FatMan for the information and engagement with the Project @all community for the amazing support and ideas
According with the feedback we can send the Proposal to Terra Station.
is your goal to bring back up the value of luna, or to get ust back to peg? If you only want ust back to peg, that can be done much more quickly by building in a fair marketswap inflation mechanism into the system, to only allow non arbers to exit at 1 to 1 at a governance determined inflation / yr of luna. terraclassic.org
i mean you can, but its not really in the spirit of cryptocurrency or decentralized systems. That website proposes a much quicker solution to getting your money back, which is to build a fair exit mechanism into the ust->luna market swapping inflation. Why werent people able to exit their ust at 1 dollar worth of luna? Who was benefiting off luna inflation? The market swapping mechanism was meant to be used by arbitrageurs instead of fairly distributed to ust holders
terra was decentralized before it got shut off and forked. Not sure what you mean. Do Kwon did nothing wrong. You can’t accuse him of doing something wrong because the network tanked. That’s the user’s fault for selling and panicking. He created a network , it was open source, the mechanisms were all in the open. Nothing he did was malicious. Maaybe you can try to get some of his money that he made from selling luna. But nothing he did directly led to the crash.
The idea is bring back value to both, UST and Luna(c?) assets, as the most popular deflationary coins in the market.
A deflationary system works as its own adding value to the coin itself, so UST and LUNA(c?) will both grow together by the network fee burning both coins, no one will arbitrarily decide when to burn.
As opposed a inflationary system, as indicated in the site you refer, creates a “quick” solution for the fastest ones and the coin will decay in a short time. So it is not attractive.
The inflationary system as AXS, CAKE, use the inflation to bring investors, and decay the rate in a planned way, until it goes to a rate that is long affordable and the investors may leave if no additional value is generated in the network.
Luna passed this inflationary interval in two days! So it is time to reverse and bring back value to the assets.
And as soon as UST goes over USD price, no one will want the peg back.
Would you sell you 1 BNB for 1 USD? Your Ethereum for 1 USD? You 1 Bitcoin for 1 USD?
The availability and work to get it creates value.
Printing money, creates inflation or hyper inflation as we testified in Luna(c?).
To have success and asset must be popular (anyone can buy thousands of Luna now), be useful (Luna has a myriad of uses as UST), and have a increased value along the time by its yield (not feasible for Luna and UST now) or value added for itself, like Gold or diamonds, and those are deflationary assets.
This proposal is therefore to Luna(c?) and UST add value to itself.
luna is not inflationary. if your market swapping ust->luna its inflationary. if your market swapping other way, its deflationary. trying to create a version of ust without luna inflation doesnt make much sense. what is it backed by? if not luna? how do you get the underlying value without inflating luna?
Luna uses inflation to pay 1 USD per 1 UST, it is inflationary system, just look at the numbers.
The reverse (deflation) will only be applied if Luna has any value, and hyper inflation bring no value at all.
A simple solution was to keep the Luna inflation up to 0.5% depeg… but it was not done, even with several alerts…
So the AMM collateral with USD is not affordable without an Stable asset, so until Luna is not recovered the UST will also no be.
And the AMM algorithm showed several flaws to be attached to USD, so to keep a value on both, the first step is recovery the value of both, and you cannot do it by mint, it is as you said to Venezuela:
“Keep printing money, so it will solve the insolvency problem”.
what is it backed by? if not luna? how do you get the underlying value without inflating luna?
They don’t need to be backed by any other, they can now grow now by themselves.
It is an opportunity to create real value to UST and Luna, not creating an anchor on both as it had before.
To introduce a tax on all transactions in the amount of 1% for burning the Luna token will allow in just a year to reduce the total number of tokens from 7 trillion to about 10 billion. This tax will be clear and convenient for everyone.
Not positive about the numbers but something ike this I think is a part of recovery, use, new firtunes, etc. Even flawed numbers adjusted over time is good work towards progress.
Ya UST does need to be backed by something , otherwise its not a dollar pegged stablecoin. Not sure what your trying to accomplish, an asset that floats freely and moves higher because you burn it? Thats not a stablecoin. And just burning or deflating something doesnt give it value either. Scarcity does not equal value
Without a killer app, I just don’t see how Terra2 has a lot of transactions, especially with the deterioration of Do Kwon’s brand.
I imagine a lot of the activity was on Anchor and/ or trickled down as a result of Anchor’s existence.
Gaming could be the next frontier, and the niche for the next killer app(s) but 25 cents a tx wouldn’t work unless Terra had it’s own Layer 2s like Ethereum.
Other than that, a way to reboot Anchor with 10% apy on fully backed stablecoins.
and bring back value to the assets.
the UST will also no be.