What if it does? CD’s in the US take 30 years to mature to their promised value. In the end you still get your money out of it.
I agree that 20 years to restore faith in an algo backed stable coin would seem hardly stable for vast majority of people who were forced into crypto without consent. It would also reduce faith in crypto overall. I don’t think this is a viable proposal. Sound reasoning, but not reflective of community needs or wants.
As @Realchaiya mentioned, the increasing rate can be adjusted. if it works then we can increase like 20% (2 months) → 100% (2 months) → 200% (2 months).
1 Like
Let’s assume current USTC price = 0.035 $.
Starting increasing rate per year = 20%
Increase 1 % more daily, then USTC will be pegged to 1$ within 477 days. (Apprx. 1.5 years)
1 Like
We should burn the supply first, then we could re-pegg USTC way more easier.
USTC also need a new treasury reserve, maybe 50% Cash, 25% raw materials, 25% cryptocurrencies.
But how can we build the Reserve?
Keep the Burning Tax of 1,2% after we have reached 10 billion. 0,6% for Treasury and 0,6% for Community Pool (staking reward)
1 Like
This proposal could actcually be beneficial for all of the community assuming the terra lab team is looking to the same goals that we do, this is an opportunitie to accept the hard times and get back to bussing and do the work it needs to be done to turn it back around.
So the proposal must be consider seriusly and act on in as soon as possible, to be prepared for the bull market wich definitely we will have different and better options.
Potential Benefits:
- Transparency in the action.
- Possible entry of specutalion capital.
- Opportunity to create a holder lock staking with bonus reward as an incentive to retain most speculation capital to the long term capital and more.
I think down side protection could be add. The basic idea is to keep the reserve safety. We must not liquidate it until we go bankruptcy.
The wrong thing of TFL do in part, they liquidate reserve to fright the dip. I think if event USTC dip into 50% on the reserve dip at 30%. Market buy will come to fright it for profit and USTC can swing from there.
In this thing, I also propose to mint LUNC into the reserve the drop quality of asset can be maintenance and USTC is only temporary drop. It give opportunity for new coming.
Mint LUNC into market is wrong. I have my land asset can hold and never sell. If every body sell it the price can go ground.
QE LUNC can stable USTC waiting for next cycle we can burn or sell into market like QT. This is the way to keep LUNC not too jump or too dip. It is a mechanical of central bank to support the economic.
I look to have enough support to go again proposal.
Do not worry that it could take some years to reach 1$ Pegg for USTC. Think about the increasing of inflow fund to USTC, think about the increasing of reserve, think about the algorithm to maintenance the reserve and the participate of community.
If 1-2 years prove that no more attack can success, LUNC will be the best currency and can hit 1000x of Bitcoin. I convince you to that.
Oil, food, machinery, payroll, retirement and more can come.
Only supporting.
I support this
After studying this proposal and all of the comments, here are my thoughts:
- it looks like there is a valid pathway here to “re-peg an algorithm”; the S-curve idea is interesting conceptually
- to the critique “why restore something that broke once already?” - I look to the example of Roman builders and stone masons extending the width of the arch in the coliseum, the cathedrals, and the aqueducts; if we extend the arch too wide it caves in, but if we extend more modestly we might find a place of safety & sustained equilibrium with a reasonable service to humanity; Terra grew to fast, it sustained too much pressure, the arch caved in – this doesn’t mean that the concept of an arch is a failed idea, however
- the critique about 20% CAGR leading to a 10+ year (or 19 year or whatever it is) period to repeg is valid, and the rebuttal to go to a daily % increase from @scott_Ahn I think takes us in the right direction towards creating trust in the algo more incrementally on the way up
- I personally believe that a 12 to 24 month re-peg period is “about right” and what we would want to achieve as a community, ie, not too fast, not too slow
Here is a new proposal, taking all of this input into account:
- we launch the re-peg at the current market rate of $0.035 as proposed by @Realchaiya
- we enable the following growth rate / curve for the re-peg journey: 15bp (i.e. 0.0015%) per day for 14 days, 30 bp per day for 14 days, 45 bp per day for 14 days, 60 bp per day for 14 days, 75 bp per day for 14 days, and finally once we reach 90 bp per day growth rate in the peg we let it run at 90 bp point per day for the next 340 days until we reach USTC 1:1 peg with USD
- following this curve, the total time to re-peg will take 410 days
- we re-set the protocol-defined upper limit on daily LUNC burn and USTC mint (and vice-versa) to a new hard cap of USD$5m per day
- we keep an open-mind to adjust the parameterization on the fly if we find thru our experience that tweaks are needed
3 Likes
Also, upon further thought, here is one area that needs more discussion:
(a) how big do we allow the new USTC ecosystem to grow in the first 2 years? (ie, in spirit of keeping a narrow arch, we shouldn’t be too ambitious in the beginning, we don’t want to grow USTC supply faster then we can generate reserves and/or real economic demand for the USTC, right?)
(b) how do we want to generate reserves? at what point will the 1.2% tax be sufficient to start to generate a reserve pool, and, how fast can that reserve pool grow?
1 Like
Excellent, staking is working again…
What about IBC ? I want my LUNC on Osmosis to be transferred too !
As on the way re-pegg, it would face some attack from one who did not believe. Winning each step of attacking would be increasing ratting for the stable coin.
On each attack, we maintain reserve by mint LUNC into reserve until the market cap of USTC is secure.
And let market maker make in re-pegg.
When confident come back, more inflow will create LUNC burn to pumping LUNC. If LUNC growth too fast, we sell LUNC on the reserve to curve it’s growth.
When time pass, we would see that the reserve is bigger than USTC market cap. Then weekly re-pegg price can be lift up.
I see this algorithm would maintain the USTC numbers.
The point is USTC utilization must be the place to use like trading pairs to others pair or buy thing like USDT or BUSD or BTC as it is the excellent liquidity provider.
If USTC holder come for profit, it create the big sale in the future.
1 Like
Can you please explain your vision for this step in more detail?
Are you suggesting that we would somehow grow the reserve during the attack? How?
If USTC re-pegg to 1$ without reserve it will face back to zero again.
If reserve mint LUNC for re-pegg 1$, at the low price of LUNC, require to mint some trillion.
See my figure…
USTC price 0.025$ x 10B = 250 mil.
Mint LUNC = 45B to reserve
On the time if LUNC pumping to 1$
Then re-pegg level can push to 1$
If not we mint LUNC every day to maintain the reserve about 20 % per year or 0.00056x if LUNC not jump.
No more as not sell LUNC into public.
So re-pegg level and growth rate is not easy to reach 1$ without reserve.
Reserve is not for sell, it is just only asset that can sell when bankrupt.
1 Like
Yes, the reserve fund can grow with the $lunc valuation, it makes sense.
Here are two new ideas:
One
- case study: after the collapse of Terra the project TerraWorld required all token holders to stake-lock their TWD tokens in a special wallet address in order to be transported to a new project environment on Klaytn blockchain; if you didn’t stake-lock, you lost your TWD tokens; upon arrival on the new chain, new tokens were issued 1:1 BUT with a new 4-year vesting period
- application to Terra Classic: what if we did the following? governance vote: all $Ustc holders have 2 weeks to stake-lock or else they are wiped out; after the stake-locking period ends $USTC starts to vest w/ ~250m tokens per year vesting over 40 years (ie 684,931 vesting per day); we would also implement a 1.2% burn-to-reserve on $USTC transactions to replenish the reserve fund over time to support the growing $USTC market cap (at $50m tx per day we would add $600k of tax fees into the reserve per day); an “mmm algorithm wrachet” of 1% could commence immediately so that we would restore $USTC peg 1:1 with $USD within ~1 year
Two
- I acknowledge 40 years is a long time, and starting without any reserve fund is a risk; how about the following? governance vote: all $USTC holders have 2 weeks to stake-lock or else they are wiped out; after the stake-locking period ends all of the $USTC balances are split in half with half going into the reserve fund and half going to the $ustc account owner but locked with 20 year vest (this implies a 50% permanent hair cut for $UST holders which seems ok given everyone is now facing the harsh reality of a 97.5% hair cut); after ~5b $ustc goes into the reserve fund it would be used to buy-up $LUNC w/ DCA buying over a 6 month timeframe (~$125m worth of $Lunc would be accumulated at today’s ~$250m market cap for $ustc); simultaneously we would implement an “mmm algorithm wrachet” of 1% daily which could commence immediately so that we would restore $USTC peg 1:1 with $USD within ~1 year
summary of Two: we would lower the bar on how much $ustc market cap we need to recover from 10b to 5b; we would use a 20 year vest of the remaining 5b to slow the growth of the $ustc economy & give time for proper diversified use of $ustc economy to evolve; we would kick-start a substantial reserve fund by buying ~$125m of $lunc; we would continuously grow the $ustc reserve fund with 1.2% $ustc tax; we would implement a 1.0% daily mmm algo watchet to restore peg within 1 year
Hmmm. This could work!? 
2 Likes
Three
- how about the following? by vote of governance: we re-name $USTC as the “US Stable Cent” & re-denominate each 1 USTC = 1 Penny USD, ie usd$0.01
- we award the ~10b of existing $USTC holders an additional allocation of ~115b $Lunc vesting over ~5 years (the net effect of giving $Ustc holders 12.5x as many coins as they currently have today combined with reduction in price from $0.025 to $0.01 would be an instant 5x gain in the economic value of their bags assuming we can achieve the 1:1 repeg which seems very realistic)
- with an initial supply of 10b $ustc before vesting begins we’d have an initial mkt cap of $100m $ustc (this is a very small mkt cap to maintain peg on initially, and quite a comfortable starting point imho)
- after end of vesting after 5 years, we’d have a 125b $ustc circulating supply, and market cap of $1.25b $ustc — it seems super achievable to build a diversified $Ustc economy worth $1.25b plus reserves of greater then $1.25b over 5 years from a crypto economy growth rate standpoint !!
- we could combine this idea with some of the earlier ideas: 1% mmm ratchet daily to achieve re-peg in year 1; 1.2% tax rate to grow the reserve pool; some kind of initial top-up of the reserve pool (maybe 10b held by Ustc holders initially, 10b newly minted goes to reserve pool, and 105b newly minted vests to the Ustc holders over 5 years?); we’d need a Community/Dev pool too but maybe that’s already been accounted for on $Lunc side of the house?
Not sure what people think about the “US Stable Cent” branding, but seems journos
might give us front page news stories as it’s an interesting narrative of recovery. Also, super doable from a mechanics, economic alignment, and sustainability standpoint:
- From a mechanics standpoint it avoids the need for people to stake-lock in order to get current $Ustc holders onto a 5 year vesting schedule.
- From a sustainability standpoint, since $Ustc market cap is currently $250m, if we took that down to $100m it would make the task of recovering peg much easier. Also from a sustainability standpoint, going from $100m to $1.25b market cap over 5 years would give us time to diversify the economy and build up a reserve fund with the 1.2% tax.
- From an alignment standpoint, Ustc token holders would accept a lowering of value today (to make the re-pegging more feasible) in return for a 4-5x gain in value over 5 years.
Plus, getting the stable coin working again will bring a ton of value to $Lunc holders. So everyone should be happy!
1 Like
Thank for your idea!
Today USTC is about 200x LUNC, if start re-pegg at 50x we mint LUNC 500B to make covering of reserve. When starting the algorithm will burn LUNC to mint USTC down to 50x. At beginning LUNC will jump into 5x 10x or what ever util re-pegg push up at first week. The balance of inflow fund to bet USTC growth and the bet of LUNC growth as well as profit taker to come.
These will create a shout in terra token some day till it saturate.
I will try to rewrite this proposal after read all again and biding in government after a week of 1.2% burning to see a response.
2 Likes
If LUNC jump 10x, USTC will push up re-prgg level 10 x as well. And could be re-pegg to 1$ when LUNC reach 1/50$ or 0.02$ with full reserve.
Or about 200x from this level.
Hope you can support the idea.
2 Likes
LUNC dont pumping to 1$ (0.1, 0.01) without working apps, but many app with UST.