Provide Exit Liquidity to USTC holders via a Reverse Auction with a 50% haircut

If you can get Binance to help USTC in similar way they help LUNC then i dont have any problem with this.

I have no clue where from did people get an idea that LUNC holders are to provide capital for some sort of USTC Holder Refund Scheme.

Since pre-crash holders recieved an airdrop of the new token - that means LUNC is free of their burden.

Why is there no community for USTC (like there is for LUNC) that treats this coin like a separate entity? Did we ever consider reaching out to an existing, working stablecoin and using this as an replacement? Maybe theyd be willing to reimburse USTC owners in exchange for their coin being used on chain.

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Yeah, this is probably the best way to go about this.

Also, with regards to your other questions, I’m not sure if you are aware but the Oracle Pool, which generates majority of the staking rewards, was filled in the first place due to UST<>LUNC swaps. This oracle reward pool is probably going to get depleted by May 2024 (https://luncpenguins.com/wallets/holdings.html?wallet=terra1jgp27m8fykex4e4jtt0l7ze8q528ux2lh4zh0f), thereby eliminating any incentives for LUNC holders/stakers on-chain (if the status quo is maintained).

As a LUNC holder and staker, I see increasing gas fee from dapp activity and re-pegging UST (without causing LUNC minting) as 2 viable ways in which LUNC value and incentives to LUNC holders and stakers could be held.

An additional thing I want to point out is that while most other proposals for re-pegging UST involve LUNC minting - this one does not.

That is simply incorrect. The Oracle pool’s assets will approach 0 asymptotically but will never reach it. And there’s plenty of funding there for another 2-3 years. Definitely not at today’s APY, but still enough to making staking (and validating) viable… at least for those who wish to stick around.

From: No Money, Mo’ Problems?. Introduction | by Edward Kim | Dec, 2022 | Medium

Given the amount distributed across all the stake (894B), one could expect Oracle pool yields in the first year (2023–2024) to be 13.06% just LUNC, but if the swapped USTC is included, the returns are 19.85%. Auto compounding could slightly improve the yields.

In the year 2024–2025, we can expect approximately 7.47% LUNC returns, and in 2025–2026 the rates fall to 4.27% LUNC returns again given a diminishing Oracle pool and all other factors stay the same. (USTC swaps are not included because they would be incredibly difficult to predict this far out). As long as we can distribute the delegations more evenly across the active validator set, this signals that there is no doomsday Oracle depletion event that will happen two years from now.

1 I2suBFgQr0BEYejh1sk5PA

Another quote from the aforementioned article by Professor Kim:

If we plot the above distribution over the period of 10 years, this is the graph that we see. There is a pretty steep drop early on in the first year and a tapering off as time goes on. In fact, the reward algorithm asymptotically approaches zero (meaning the Oracle pool will never run out), and continues on well past the 2 year mark.

Now whether or not validators will remain incentivized to keep the lights on given the lower payouts past the 3-year mark is another matter entirely. Also, your timeline is off by a whole year: there’s enough runway for at least 24 months from now (and then easily another 6-12 given how desperate we become, hypothetically).

I do, however, agree something needs to be done regarding USTC and the Oracle.

But just because no one’s managed a robust enough repeg to date doesn’t mean we should rush one.

We only get one chance at this! And we need to choose wisely. :wink:

Shalom! :pray:

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Please check the Oracle distribution parameters here: https://fcd.terra.dev/oracle/parameters

The Reward Distribution Window is 9400000 blocks (approx 2 years). The OP reward distribution started on 13th May 2022 and will end approx 13th May 2024.

The distribution curve is linear and not logarithmic as can be seen here: https://luncpenguins.com/wallets/holdings.html?wallet=terra1jgp27m8fykex4e4jtt0l7ze8q528ux2lh4zh0f

Glad we can agree on that one :slight_smile:

You’re sourcing that from Strathcole’s site. Mine’s directly from Ed. Who’s right? :man_shrugging:

All the data I’ve seen points to a curved distribution schema, not a linear model.

Have you read the article I posted? If so, where’s the error in Ed’s logic?

Shalom! :pray:

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Yeah, that’s probably right.

I think they both are. As per Ed’s article:

There is a pretty steep drop early on in the first year and a tapering off as time goes on.

Since we are still in Year 1, the drop appears to be linear at this point. However, as time goes on, it should start tapering off.

But like you have already mentioned, something needs to be done about USTC and the Oracle Pool, preferably without re-minting LUNC.

Binance’s volume for USTC is $17.5M per day. 0.1% (fees) is 175k USD, at current price $0.024 is 7.29M USTC per day which could be burned. Divided by the total supply 9.8 billion is only 3.6 years. As burn increases price and volume increase, so just from Binance it could be burned much quicker.

If we can get Binance to burn their USTC fees we can burn the whole supply in a few years, so easy to hit $1 or more, it doesn’t have to stop at $1. It’s the simplest and risk free path to achieve $1 and greater USTC. So far I’m not really convinced by any of the USTC re-peg proposals. I think we should get the same model we have for LUNC (Binance burning fees) if we can for USTC. USTC burns a lot faster than the LUNC supply as only 9.8 billion supply.

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Haven’t crossed checked these numbers, but yeah this seems very simple, straight-forward and effective. Thanks for sharing :slight_smile:

Although not sure of this, coz as price would increase the amount of USTC burned would reduce, considering volume remains the same.

But overall I agree with the approach. :+1:

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Judging by past experience, we see during bull moves volume increases significantly even over 5x, we saw that in the USTC pump to 9.9 cents volumes were huge. If we had 0.1% of fees burned then yes you could burn less at higher price, but usually the volume increase more than compensates for the higher price and you get NET higher burns.

For example say 5x volume during a USTC bull move, price 100% gain to $0.048. Fees from Binance would be approximately ($87.5M x 0.01) 875k USD, at $0.048 = 18.2M USTC burned per day.

Yes there could be a reduction in burn as price increases, but from what we have seen in both USTC and LUNC bull pumps, the volume rises so much the net burns do increase. During a stablisation period when the price isn’t pumping volume can subside and at the higher price you may burn less. But it’s not that straightforward, as the price is higher and having risen recently results in interest in further price rises, more investors, better sentiment, more hodlers etc. Like if USTC was continually trading in the 10 cent range it’s likely volumes would permanently increase from the current.

Seems like a discussion with Binance to burn their USTC fees from the LGF is a good idea, also we could do a signalling prop of governance like we did for LUNC back in the day, asking Binance and others to burn their trading fees for USTC. If we get Binance to do so like we have for LUNC it’s a win-win and it doesn’t interfere with work on any USTC re-peg proposals.

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Agreed.

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Hi @ek826 could you as part of the TGF ask Binance if they would be willing to burn their USTC trading fees? If they were interested I think that would be a great outcome. As TGF is in contact with Binance about LUNC burns, seems like TGF is best suited to ask the question to Binance about burning USTC fees also. Thank you.

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Cex’s never back payout ,i think With the terra team, they already took their money out at the time of the accident. They defraud small investors and turn a blind eye to everything. In addition, in the event of an accident, there are money outlets loaded with anchor, luna team wallets, ozone wallet, lfg, and binance as ustc. binance hides them
in my opinion best solution is court action, ban cex’s within countries even if there is no refund

I don’t get why ustc and reimbursement to old luna holders have anything to do with lunc.
Do Kwon separated the chain and got new token. Go ask for reimbursement from him aka luna.
Why should lunc new investors be exit liquidity for old ustc holders?

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can be developed in test environments. try, improve, try, improve. As a result, we won’t know until we try. :slight_smile: :+1: