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

Agreed. I understand that the team want us to hold and don’t want people to leave. I have my life savings on Anchor too. Send last batch there week before depeg

So, I think I can wait a week to see positive changes and UST above 0.9. For now, one important chart I was thinking for is going up — new user for gov proposals, and forum activities

Some repayment should be done or at least said that it will be done short term

Also, I would like to see more public relation steps to be done

Razor-blade attentions is good. Informed community is better

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As a student who put most of my scholarship and savings here and it’s not that big of an amount compared to other 4k to be exact. UST was supposed to be stable and now I lost everything. For someone like me it takes over a year to accumulate that amount. Imagine now not having the funds to show my government that I have enough money to live by to renew my visa. Imagine risking being evicted from a country just because I trusted ust a supposed stablecoin. I had my funds in USDC but decided to make the switch since it looked more promising. Guess I will regret this all my life. Should’ve just bailed out at 80 cents better than 10. Why not halt the blockchain as soon as it depeg a considerable amount why wait all this time? Why would anyone not take emergency actions early?

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100% agree, this would be one of the best moves to do to regain trust and making the project starting again.
I still have over 200k on Anchor, i spent over 15 years of hard work to accumulate that amount. I will never be able to do such an amount back, as right now i’m unemployed, so my life is fucked.
It was not supposed to happen and something must be done to solve this.
I can understand for LUNA investors (where I also lost money) because that was a purely speculative investment, but in the case of UST holders, people just wanted a stable coin, that’s crazy.

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100% agree .No currency survive with out trust. I think this is the best way to regain trust especially from those who trust the project to the end.
If you try migrate to new coin there will be no trust and the coin will collapse on the first date.

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Imaging being in an internship all this week and just looking at your savings in an anchor and at ust value.

Hi everyone. Thank you for the support on this proposal. The last 24 hours have been incredibly taxing on everyone. First things first - remember, most of you still have your health and family. Things can get better. Money is not everything. To those of you considering ending your life - wait a few weeks. You never know. There’s always another day and things change fast in the space.

Here are the notable updates worth talking about.

  • LUNA is dead and unsalvageable. I see a lot of discussion on the forum is being centered around somehow recovering LUNA’s value. There are a lot of problems with this approach that I won’t go into, but obviously it will be impossible to make everyone whole, especially given that people bought all the way down. Making someone who bought LUNA at $30 whole would involve making someone who bought at $0.001 a billionaire. The process is too time-consuming, complex, and expensive. It’s just not happening.

The Terra ecosystem was made for UST, and LUNA was a supportive mechanism. This was all about UST, and Anchor was marketed as a savings account for the ordinary person. I’ve spent a few hours watching Do Kwon’s interviews and TFL’s customer-facing marketing material. Anchor and Mirror were essentially blue chip blockchain products built to replace people’s bank accounts and 401(k) accounts. LUNA was a speculative asset and everyone knew it - people made and lost spectacular amounts, as is par for the course for a volatile altcoin. This was not the expectation with UST and people don’t deserve a 95% haircut on what was promised to be a safe asset.

  • TFL’s LUNA reserves are now virtually useless. Due to LUNA inflating away, there’s not much money that TFL can salvage from their LUNA reserves. I do appreciate their decision to burn their UST reserves, which shows their commitment to at least trying to defend the peg, but of course, it won’t be good enough because there’s simply too many billions trying to leave the ecosystem. As I mentioned earlier, UST will likely death spiral to zero. My point is, if any TFL funds are now used to buy back UST directly, it will have little to no effect on anything.

  • LFG’s silence is deafening. The money that Do Kwon pulled out of the ecosystem to protect the peg has been ‘loaned to a market maker’. This money belongs to UST holders, and everyone needs to know exactly where it is, what’s happening with it, and how much is left. These are important figures so a plan can be devised going forward. Keep in mind, from the LUNA machine (including Degenbox’s helpful liquidity boosting), Do Kwon was directly able to cash out hundreds of millions of dollars from UST into other stables. Much of this was designated to protect the peg so we are due an explanation. (I’m also of the opinion that some of the hundreds of millions that entered his personal wealth should be returned to the community, but that is a moral/ethical/legal issue that’s mired in contention, so I won’t suggest it as an official part of the plan.)

Essentially, it’s important now more than ever to execute the refund plan with the leftover money from LFG. We don’t know how much this is - I suspect it’s probably a few hundred million, likely under $0.5B. It should be enough to refund everyone who had under $300k in Anchor. I need to reiterate that this group deserves their money back the most. This group probably earned it through hard work. This group is more likely to commit suicide. They are also the largest (and most reckless?) group, so it is in Do Kwon and TFL’s personal interest to appease them, because to be frank, their lives are in danger. You cannot swindle hundreds of people out of their life savings and expect no pushback. I personally think this is wrong - violence is not the answer - but I don’t speak for everyone.

I really want someone from TFL to reply to this. It is starting to look like the only viable way forward. Seeing all the “LUNA v2” discussions on this forum is just laughable. There is no logic to it.

All the best everyone.

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To clarify, as I stated in the addendum, the snapshot should be taken the moment the first depeg happened. People who held their UST up until now can be fully reimbursed by returning it 1:1 for USDC/USDT. People who panic sold and/or gambled on the market will be eligible to trade back the same amount they had during the snapshot as long as they return the same amount of UST, which will involve buying it back. It’s fair as they don’t get double-rewarded.

I agree with this. This is not your run-of-the-mill DeFi exploit. This was marketed (highly successfully, I might add) as a blue chips savings account and families put their savings in. It’s a little different from losing it on something like Bitconnect. The two are not really comparable.

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I dont see this proposal in terrastation, but i would vote for yes. But one thing concerning the compensation method you mentioned, I have moved out UST from Anchor a few days after depeg, but did not sell all of them in CEX. Now it doesnt look like a good idea to commit more capital to buy up to the same amount of UST without knowing if this proposal will be passed or not. Could not it be more easier just compensate the amount we lost by showing the snapshot of transaction history?

100% Agreed!

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“It is clear that LUNA cannot be salvaged and will be used as exit liquidity to retain some of UST’s peg, which is its purpose anyway.”

You’re kidding right? Terra is a proof of stake blockchain. You stake luna on nodes to tell the network which one should process the transaction. Terra cannot function without a consensus mechanism. So without Luna there is no blockchain nor UST… it’s not just exit liquidity for UST holders.

I would like to propose that people who haven’t even bothered to read the white paper stop clogging the governance channel with nonsense proposals

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The Terra team just retweeted about how the community is considering many proposals. I hope they’ve seen this one. I posted a reply to stablechen’s tweet about this proposal. Let’s make our voices heard!

And thank you FatMan for all the work you’ve put into this. We are all incredibly grateful.

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I Love the idea but from where will the fund come from?
UST supply 11.1bn
it’ll be burned as LUNA is printed.

the UST / aUST amount in the ecosystem currently worth nothing.

even if they can find 50% collateral that is 5bn USD.

I am sure you moved your funds after this happened. So having a snapshot at/around the de-peg AND knowing your current balance would make you qualify to the airdrop.

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There’s only about 1.8B or so left in Anchor and if we prioritize just the small holders which are 90%+ of the users it should be enough. They had 3 billion dollars worth of money/bitcoin reserves not too long ago. I don’t think they deployed all of it.

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that would be an awesome thing. The thing is I have UST on binance (I transferred there 2 days ago). The full balance is untouched.
so even if 1.8B is on Anchor they would need to take care of the ones who left the way, but still on the train.

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You r right, LUNAv2 will not last a day (if we try to move that way now)

TFL needs to try Long hard way than just move to the short cut.Project are dieing but trust may not.If this project can survive no matter how long it takes.Trust will follow you to LUNAv2. Ortherwise…

Hi all,

I have been a Terra hodler for over a year now. Before de-peg I had Luna staked with Terra Station worth many thousands of dollars at recent ATH and also thousands of UST deposited in anchor (no leverage/borrowing etc). My funds are still exactly where they were before the de-peg as I want to believe Terra will survive this somehow.

I have heard a few different idea’s being floated by the community and so far I believe this is the best one if the Terra network isn’t going to be significantly re-invented.

My understanding is UST is central to the the Terra eco-system as its been designed, therefore we need UST to be stable and pegged to 1 USD. Luna was always intended to be the volatile and speculative asset. The only reason to my understanding I ever had thousands of dollars in Luna was because of UST holders/borrowers.

Therefore if Terra is to go forward without significant re-design we must make good on those who held the asset that gave Luna it’s value. I agree that if it is technically/financially possible we need to do the ethically right thing and save the small and medium UST holders first. This should also hopefully, as previously mentioned, show that the Terra team and community has integrity and can be trusted.

I have resided myself to accepting my current losses but I have not given up hope that this amazing eco-system and community will prevail if we do the right thing even if it is hard and won’t please everyone at least in the short term. If you believe in a better money, if you are tired of being a slave to the corrupt financial systems, Terra must survive.

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This wouldn’t be a governance proposal, I don’t think - it’s more of a suggestion directly to TFL/LFG about what to do with their money, ie. how to ‘defend the peg’ (IMO, the best way to defend the peg is give people their money back 1:1). LFG pretty much has free reign over this (there was no voting process when they decided to loan their BTC to a market maker).

The reason a snapshot + compensation doesn’t work is because there are people who have already moved their UST off-chain and sold it on the open market. I will try and explain the refund situations a little better.

Situation A: You saved 10,000 UST in Anchor and did nothing during the depeg. Your 10,000 UST balance will be snapshotted, and you will be allowed to return it to TFL and redeem 10,000 USDC. No additional purchases will be necessary since you have all your UST and didn’t move it.

Situation B: You saved 10,000 UST in Anchor, but panic sold it when UST depegged to $0.50. You now have 5,000 USDC and no UST. When the snapshot happens, you will have an allowable refundable balance of 10,000 UST, but you must buy back UST on the open market in order to get the refund. This prevents you from making 15,000 USDC when you don’t deserve it.

Of course, due to the nature of the markets, there will be people who will have to buy high & sell low, or sell low & buy high. This is the risk they took when they sold their UST, and I feel this solution is the most fair/equitable.

You are right - the blockchain operates with LUNA as a governance token. I don’t know if you’ve noticed yet, but that mechanism was completely ruined when LUNA crashed to dust and anyone could manipulate governance. There’s a reason the blockchain was frozen. It is now essentially centralized (which is fine… the system is toast anyway).

Returning 50% of all UST is impossible. That would not be the play here. But, paying back >50% of users is completely possible. We would need 5-10% of the UST market cap to make most people whole. If you go through the post (and first reply, where I’ve detailed some numbers), you’ll understand what I mean. It’s basically leveraging the smallest amount of money into maximal good for the community, and it will likely save lives.

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No its both PoS AND governance. That’s why terra shut down today and reopened later. The hyperinflation of luna created a security concern that someone could purchase enough luna and take control of the entire blockchain.

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Situations C: You saved 10.000 UST in Anchor and did nothing during the depeg. You moved your 10.000 UST to another terra wallet (exchange) and did nothing.

what do I get? :slight_smile:

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