[Proposal] Tiered repayment: 1:1 USDC refund to all UST holders up to a certain cap per-wallet using LFG funds, favouring small wallets

so all this is based on the assumption that TFL has 1.5bn what if this is not the case? i think terra has no btc left basing on the tone of D kwon proposal. Moreover, although those whitelisted wallets will have to buy back from the open market for redemption, it will come at a cost for those who tried supporting the peg and ended being used up as exit liquidity, especially those who bought around 80c and 90c. $1bn of buys wont be enough to even get the price close to peg. Also ust was widely used in other terra Daaps which i think will not get any redemption. Also if the whales are not indemnified they will be the ones dumping on the market further driving the peg down.

I imagine thousands of people found themselves in this situation.

Everyone needs to consider what bankruptcy would likely look like as it helps understand the motives of various players. Some say hey this is crypto, the law doesn’t know what to do and it’s all new and different and whatnot. I disagree. Prepare to be shocked when a judge says this is all the exact same as an argument from 1425 if you just change the word crypto to mule (i made this case up, but hopefully you get the point.)

It’s very likely that a court would look at all of the players in Terra (Do, LFG, LFG, Anchor, et all) are really one common enterprise with joint and several liability. It’s likely the validators are part of this enterprise and would be dragged into this proceeding, putting their assets at risk to Terra creditors. The moment a bankruptcy is filed either by the debtors (Do, LFG, validators, et all) or by the creditors in an involuntary proceeding, the named debtors are frozen and can not make any moves without court approval and other efforts to collect on claims also must stop, it’s in the courts ballpark now.

The transactions with Binance and Gemini or anyone else within recent time would be clawed back to the bankruptcy estate and those parties would have claims in that proceeding. Anyone who benefited that can be identified is at risk of a clawback, including the bogyman attacker, if they exist.

The bankruptcy court would then collect everyone’s claims and the parties would make arguments about putting the claims into classes and assigning the values to classes and how the estate will be split up. Holders of aUST and UST would be making the argument to the court, one I believe would be successful, that they hold claims as creditors of various priorities. I believe that aUST has a superior claim to UST, the court would decide. Different classes of creditors elect representatives to a creditor committee to represent their respective creditor interests.

Potential claimants like Binance and Gemini that had the deposits clawed back would likely have claims on par with other non-priority creditors. The lawyers, of course, get paid first, and then after all of the creditors are paid according to the priorities the court decides, if there is anything left equity gets the rest. I believe that a court will agree that Luna holders are the equity holders. This bankruptcy would exist in multiple jurisdictions that generally play nice with each other, but not always. US creditors potentially could have the best deal by proceeding in US court and clawing back LFG’s deposits with Gemini.

It is in everyone’s best interest to settle with as many of the creditors as possible to avoid this otherwise inevitable outcome. Some participants likely understand they are exposed here and others need to consider what their exposure could be. Anyone with potential exposure should be consulting with international bankruptcy attorneys. I think that if there are enough assets to proceed with the @fatman proposal, claimants should agree to release all parties of liability as part of accepting the settlement.

This simplifies a complex topic for sake of understanding and should not be considered legal advice.


How do you think, what would happen with UST price on CEXs, when people who panic sold at 0.1-0.2 will try to make a buy back to get an airdrop?
UST will rise up, and these people screwed.
So, your idea is good for one who still holding, perfect for those who sold at 0.9 and managed to buy lower and complete disaster for people who sold at 0.1-0.3

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Why not, but that is obviously secondary… Remember that what drove Luna’s price so high was the ust TVL growing in Anchor, (UST holders), pretty much solely. Validators and developers owning Luna at inception obviously sold some a long time ago and are most likely doing well financially…
Nothing to pity here.

I imagine so… Question is, should we transfer back on Terra station?

All voting no with veto are LUNA holders crying as fk. This shouldn’t even be goin to the votes. This should be done ASAP.

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Probably the best proposal I’ve read

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Not sure but couldn’t on chain analysis be applied here to account for which whitelisted wallet sold/bought when and for how much after the snapshot, and their redemption adjusted accordingly.


@dokwon give our money back my life is ruined nothing to lose anymore


@Jeff_Coudert why would I be talking about inception. I am talking about the end. Inception would be inherently wrong, most of them made a large profit probably by selling with time.

Most of the protocols had their funding in UST and LUNA (and maybe other Terra assets), are thus left with nothing and are most likely going to be excluded from a “save the small guy” reimbursement (which I am totally in favor of). So the teams and employees are left with nothing and don’t even have a job anymore, all I am proposing is to give them a 2 month runway to figure things out.

Sorry - giving thank you tokens and saving jobs would be nice, but I want to prioritize restoring people’s savings first.

The majority of nodes for major blockchains (eg. Bitcoin) operate altruistically. The yield is usually a side benefit. In any case, if a node operator is no longer economically viable, they should shut down.

This is just a reskinning of the “make LUNA investors whole” debate. Yes, people lost money on LUNA - I understand that. I have explained many, many times why it would be difficult to make them whole and why it’s not a part of this proposal. Hopefully someone with gainful employment would have some sort of non-Anchor emergency fund. If their emergency fund was in Anchor then they would be covered by this.

I appreciate the sentiment but again, we are in triage mode.

We have to encourage LFG to do the right thing. Legality-wise things are unclear. I have spoken to lawyers and their thoughts differ on the matter. One opined that LFG has no legal obligation to do anything with the funds. Another suggested that given that LFG advertised a $3b backing fund for UST which led to billions in investments, they are obligated to make good on their promise otherwise they would be committing investment fraud. It depends heavily on the laws of the jurisdiction the case would be fought in as well as how well our lawyers can convince a judge.


there was no reason and no further security staking UST in anchor instead of staking in binance or whatever else. so there is no reason to prioritize someone. All ust holder believe in terra ecosystem and all should be refound at the same time


Terra (LUNA) Blockchain Explorer by Staking Fund look at this site look 1164 document validator said no to repeg ust…they silence make me crazy

That’s what I did. I’m not selling at 0.15 cents. My amount was in the Mars lockdrop so I had no chance to sell it at even a semi-decent slash rate.

whales will use the retail buying as exit liquidity

Freeze $UST withdrawals. Delist $UST/USD

@PaulShore37 Thank you, that’s a great perspective.

Do you have a legal background? If so, I have a few questions out of curiosity:

  • What do you feel about LFG’s legal obligations to fulfil their public promises to UST holders?
  • Do you think Do Kwon’s personal assets might come into play here given that he enriched himself heavily via the LUNA machine?
  • What jurisdiction would this case fall under? Are bankruptcy laws favourable there?

I really hope this doesn’t go the legal route TBH. Sorting this out via a refund wizard would be so much faster and more effective. I’ve been watching the Mt. Gox insolvency proceedings play out for years. It’s like watching grass grow.


why freeze and they need to transfer for redemption

Terra Daily on Twitter is supporting your proposal just now @FatMan @dokwon