Unless a white knight or angel investor comes forward, there isn’t enough money to enact this proposal. At current prices, you have ~$243M between Binance, Justin Sun, and the remaining LFG reserves, which is a fraction of the $1B - $1.5B.
What if you did a lock drop for all UST on chain, and everyone who deposits UST can get 1 USDC either paid by donations from anyone wishing to step forward, or a percentage of future transaction fees, which would be sold for USDC and distributed to users. This will also allow some of the UST to be inflated away over time.
There could be some mechanism whereby there are certain tranches depending on how much UST is contributed, to prioritize making people who deposit smaller amounts whole first, and if someone deposits UST later (a speculator who wishes to buy UST on an exchange) they would be put in a lower priority to repay.
So buckets would be something like:
5001 - 10,000 UST
10,001 - 25,000 UST
25,001 - 50,000 UST
50,001 - 75,000 UST
75,001 - 100,000 UST
100,001 - 150,000 UST
150,001 - 200,000 UST
200,001 - 250,000 UST
New UST (for speculators who contribute UST after initial lock-up)
Then it would be a marginal system so if you have say 300,000 UST your 1st 5,000 would be in the first bucket, second 5,000 would be in the second bucket etc…
And then you pay off bucket 1, bucket 2, bucket 3 etc…with either contributions from people who wish to bail us out, someone wishing to be a new investor in the project (they get equity, and their contribution is used to pay people out), or a percentage of swap fees generated by LUNA V2.
The reason I would propose this, is if 1 UST can be exchanged for 1 USDC (eventually), it will also create a bid for UST on exchanges, and would vastly improve the value of current funds available (given LFG holds 1.8B UST), and speculators who believe the network can generate those fees can provide exit liquidity for anyone who does not wish to bet that Terra can make a comeback and generate enough fees to make everyone whole eventually. Currently, I don’t see a whole lot of sense in LFG selling 1.8B UST on the market for 8c on the dollar, but if you can incentivize speculators to create a bid on it, then LFG could sell their 1.8B UST down over time for a whole lot more than it’s worth now.
To add on, if you have a large sum, there could be an option to ‘retire’ your UST in exchange for a LUNA V2 token which would essentially give up a portion of your UST debt and take equity.