This is the most overlooked part of the proposal. Why would any exchange list a new token? Why would anyone who lost big hold it? Add a lockup or vesting period to help, but people will still dump when able or they just wont use the new chain. We need to salvage the Terra network and focus on keeping the great protocols and teams that are here. Everyday other networks are creating funds and grants to poach builders, we need to burn as much Luna as possible, even if that means sacrificng UST holders short-term. We could create a fund or pool to pay UST holders over time out of Luna fees or create something similar to Halo that the community can help fund. No more algostable mint/burn and we adopt a current stable. We can start creating our own version of DAI and take another look at the algos in the future but focus on saving Luna and the Terra network.
completely different from LUNA. UST should take up to 20% of the risk, but LUNA is not a stable currency, and it itself has volatility risks. I think it is reasonable that the holder of the UST could receive 80% of the compensation
I thought you said you’re going offline for a while
i fully support this, even though i hold a bag of LUNA, i still want back my Life saving UST
To be honest abandoning Luna will not encourage new buyers, actually the opposite. As CZ mentioned try to fix what you have and burn. It’s kind like “fool me once shame on you, fool me twice, shame on me!”
@Gio1 Your argument is invalid since Fatman says he owns both UST and LUNA. Also the rationale for this proposal is that it is the least inexpensive way to make UST owners whole by binding the scope. There is no way to restore LUNA to anywhere near its peak. At this point you will be lucky if LUNA ever reaches $1.
Where would the funds for this come from , no BTC in terra wallet ? Wheres the paper trail to support any action ??
So I have been following this fiasco silently but I can’t stay silent any longer.
1.Why are you just talking about UST? People didn’t only loose capital with UST. People also lost money with Terra. The way you are simply ignoring this fact I find highly disrespectful. You do realize the two are intertwined right? There wouldn’t be any UST without Terra so to treat these two separately doesn’t make any sense.
- Taking only a snapshot before the de-peg, I also find highly unacceptable. So the people that sold and accelerated the death spiral (although they were probably only able to cash out parts of it) are being rewarded more than the people that had faith?
This is no way to treat your community. If anything, there should be two snapshots, if you sold along the way you should get less because you already got some of your funds out. The people that stuck with the protocol and had faith (as was encouraged by the team on Twitter) should get rewarded for doing so. They most probably waited untill almost nothing of their capital remained and should be compensated for doing so.
That is the 80,000 BTC question right? Wtf happened to the reserve?
Will they be creating a Luna v2?
@FatMan I am confused. In some comment, you said TFL may need to sell lots of LUNA, presumably to get USD to implement this refund? If that were the case, do you understand in a sale no money is created out of thin air? So if e.g. $1B is expected to be made selling LUNA, it will come from people buying LUNA on exchanges?
So basically you rob naive people of $1B to give it to UST holders. In the end, someone ends up losing $1B, It’s just not you. Is that the plan?
I understand if TFL has BTC, to ask to sell it to repay UST and LUNA holders. With that I agree, and BTC will be able to withstand it (and most importantly, people buying BTC will not be buying a worthless asset). But to sell LUNA. That’s basically saying screw you. If you buy LUNA now it’s your problem, your loss. Well, the same could have been said about UST. If you put your life savings into something inherently risky for 19% APY, that’s your problem too, isn’t it. And you can say ‘it was a stablecoin’, I was promised $1. No, you bought into an algorithmic stablecoin, that did what was supposed to do (screw us all, but we’re all in the same boat, under the same algorithm)
I really like most parts of your proposal, but leaving LUNA holders aside, and selling LUNA to gather funds and 2 big no-no’s for me.
No one buys UST in pursuit of 20%, will there be LUNA? The value of LUNA comes from the UST% gain. The pursuit of UST 20% is a good risk, but this level of risk is completely different from LUNA. UST should take up to 20% of the risk, but LUNA is not a stable currency, and it itself has volatility risks. I think it is reasonable that the holder of the UST could receive 80% of the compensation
I am sorry but your analogy is leaving an important component out: risk and reward. What should be your motivation to buy my hammer? ( owning a hammer will allow you to not only in joy having the hammer but also make 20
Percent on your investment.)
You risk giving up your dollar because Because is the only way you can make the 20 percent. Is it fair for you to make the 20 percent yield and When the deal goes south you walk out risk free?
- Only initial deposits made into Anchor will be eligible for the refund, not yield. This will free up a decent percentage of capital which can be redistributed to more people. We should prioritize giving back people the money they actually put in, and refunding Anchor profits would cut into that. This can easily be calculated on a per-wallet basis using the methodology from [this tool]. Put simply, if you put 20,000 UST into Anchor last year and now have 24,000 UST, your refund amount would be capped at 20,000 UST.
This approach on only allowing “initial deposits” cap in theory is sound. However, in practice, determining what is an “initial deposit” vs. a “round trip” deposit is immensely complex and may not be feasible. The approach used in the tool (link) provided above does not net out round trips in/out of Anchor earn in will show an inflated investment number unless netted out.
Simple round trip example (they can get alot more complex… but aim is to outline the concept clearly):
- Investor swaps $1000 USD from tradfi account for 1000 UST and into their terra wallet.
- Anchor Deposit #1: They then deposit that 1000 UST into Anchor earn (which is really a swap from UST to aUST)
- A month later, they withdraw 1020 UST (initial investment + interest) back into their terra wallet and then off terra chain (to a CEX like NEXO as example)
- A month later, they withdraw 1040 UST from Nexo/CEX and send it back to their Terra wallet.
- Anchor Deposit #2: They then redeposit 1040 UST back into Anchor earn.
Feasibility of Approach:
There is no way to know via transaction trail on the Terra chain that the Anchor Deposit #1 & Anchor Deposit #2 are the same. In this example, the transactions the Terra chain is aware of ends when UST is transferred to the CEX. It will appear to the Terra chain that the investor has deposited 2040 UST into Anchor. It is possible that transaction records exist from the CEX that could help trace, but these will be off chain and since CEX’s pool users assets, will be very complex and require coordination/compliance from the Investor and CEX. The above example is the simplest looping scenario I can think of. They can get much more complex involving multiple chains, DEXs, and swaps. Even round trips into Anchor completely on chain, where swaps to other assets/stables on Terra chain are involved will be very difficult to track.
I cannot envision a scenario where this approach would ever generate a deposit amount calc that is LESS than what an investor deposited into Anchor… it should always lean higher that what was really invested.
Since this amount is only proposed to be used as a cap on recovery amounts and does not definitively determine the amount of payout, it may be acceptable that the “cap” is over-inflated. My purpose here is not to advocate for a particular solution, rather to bring awareness to the limitations of this approach to the community for comment/discussion.
A good perspective on the LFG funds situation courtesy of Jack_ust. (Posted with permission from him and the Discord mods)
Important to remember that if severe legal action is taken against TFL and if LFG is counted as the same entity there may be heavy restrictions on what can and can’t be done with the funds without a judge’s permission. We may have to temper expectations.
There is a great deal of uncertainty surrounding where the funds are, how much is left, whether or not we can even use them… So I think it’s only worth discussing things more in-depth once we get the much-needed update. Let’s relax and standby until then.
Thank you for your message. Sorry to read that it has impacted you so much… We have to stand still and think of the things we still have that’s the only way forward… Like a roof over our head and food on the table. We will get out of this together!
But we also have to stand together to make sure things are going to be made right. There is a LFG fund for a reason, and this should be used as it supposed to. To back UST holders and make up for their losses!
The original proposal involved selling LUNA. This was when LUNA still had value. Unfortunately since then the total value of LFG’s LUNA reserves has crashed to under $500. All that’s left are the reserves in other currencies.
Hi please take a look to my proposal as it is related to yours, let’s fix this together.
Hi, I have staked UST at Binance, and they are still there at my fiat and spot wallet, will I get refund?
You should consider compensating EVERYONE!!! Not only forking the chain to the moment in the past therefore forfeiting all those who also invested / spent money and still became victims of that crash!
Even CZ mentioned that. Sounds fair and reasonable.