The only path forward is to restore the UST peg. Any fork without doing this will result in a valueless token that has no trust. UST must be repegged at $1.
Other proposals involve unfair snapshots, payout limits, and other things which disadvantage some group, all of which are inherently unfair. Sellers do not deserve to be paid twice - once for their initial sellout, and again for a snapshot. Such proposals amount to theft. Instead, the free market in its current state decides who holds UST, not any historical block snapshots which goes against the very ethos of immutability and how a free market operates.
The only path forward is to restore the peg via a simple strategy. No need to make anything complicated. In this way, eventually, everyone wins. Here are the steps I propose:
- There is presumably an outstanding BTC fund, let’s call this fund
- Whilst the value of fund > marketcap of UST, purchase on the open market UST (example: at $0.15 per UST, the fund is worth more than the marketcap of UST, therefore the fund will place buy orders for $0.15 UST).
- When the value of fund < marketcap of UST, stop step 2 and wait. Ie: Do nothing. Move to step 4.
- Wait until the price of BTC appreciates until the requirements for Step 2 can be met again. Then proceed to step 2.
- Repeat Step 2, 3, 4 until all UST is acquired or the peg is maintained at $1.
This is a simple algorithm and is the only fair solution. All UST acquired via the fund should be immediately burnt.
Risk: BTC may not appreciate enough in value to cover the marketcap of UST (ie: Step 2 may never be reached again, and the peg will remain below $1 permanently). For this to happen, BTC will need to never go up in value like it has historically. This is unlikely to happen (BTC almost certainly will go up in value again), but there is a risk it won’t, and this proposal fails.
The risk of BTC never going up in value is necessary and must be acceptable because there is no other fair solution that will work for a repeg. This solution involves no snapshots, no caps, and rewards anyone that is currently holding UST the way it should work in any bond market - UST holders are entitled to $1. Sellers that sold their UST may buy it back again whilst the price remains low. If they don’t wish to do this, that’s their choice.
All other proposals amount to theft of funds of liquidity providers after the depeg event.
So how would you do that? UST is backed by LUNA and the underlying asset is close to zero. Isn’t it obvious that LUNA needs to be saved first?
This would not involve LUNA, but the collateral that supposedly exists in the form of BTC maintained by the LFG.
Everyone will cash out or short it within the first hour of its launch. Good luck with that.
How so? Please read my proposed solution carefully
And what you think about the people who lost their entire life savings ?
I think fork is inevitable.
We need to bring the blockchain to the week ago.
And use these funds to re value the chain and the assets inside of the chain.
You cannot steal from buyers that provided exit liquidity to sellers who held UST before hand. This is unheard of in free and open markets, and goes against the foundational principles of decentralization and blockchain. No one is forced to make a trade.
People that lost their life savings, if they still hold their UST, will eventually be repaid $1 if the value of BTC continues to rise as it has done historically.
Which fool will put savings in a “stablecoin” backed by BTC? You are taking as much risk as owning a BTC then who not directly put money in BTC and get a better risk/reward ratio?
The moment BTC price will fall or we enter a bear market, reserves will drop resulting in mass cashout. It will be the ideal coin for shorting.
From Terra fork won't work, says Binance CEO Changpeng Zhao
“As The Block reported on Friday, more than $1.2 billion in bitcoin reserves remain unaccounted for by the Luna Foundation Guard. It accumulated more than $2 billion in bitcoin reserves to support UST and provided a loan of $750 million in bitcoin. The rest remains unaccounted for. Additionally, 9,658 bitcoins (worth more than $288 million at current prices) also remain unaccounted for.”
I must ask then: what collateral?
As it’s mentioned in the Risk section, it’s assumed BTC will go up in value eventually, as it has done historically. If it does, then my proposal will work. It’s not ideal, but there is no better proposal I can think of that doesn’t involve theft.
If the post you link is true, then all proposals on this forum are worthless. If there are no funds anywhere, we may as well close down the forum as we’ve all been scammed. Of course this proposal assumes the fund exists.
Then why not buy BTC directly?
EXPAND! I offer the LUNA self-healing mechanism! Enter in the burning code 5% of coins from the purchase / sale of each operation until the moment of restoration of the freedom of coins as of May 9, agree this with the binance #saveterraluna #saveterra #saveterraluna #Binance мммммм
How would you get money to buy the BTC directly? Currently you could hold 10,000 UST which are essentially worthless. If $2B of BTC is used to start buying them up, they’re no longer worthless.
EXPAND! I offer the LUNA self-healing mechanism! Enter in the burning code 5% of coins from the purchase / sale of each operation until the moment of restoration of the freedom of coins as of May 9, agree this with the binance #saveterraluna #saveterra #saveterraluna #Binance
I was speaking from your perspective of creating UST backed by BTC.
The fact is that they don’t have money, even if they have it’s been removed for us to see they have none. Even buying back and burning LUNA requires money so does every other proposal out there…
Well if the $2B reserve fund was a lie, then what are any of us doing here talking to each other? That’s a far bigger problem.
That’s the problem. They claimed UST was fully backed + more. If that was true we would not be in this position today. Maybe they had funds but when things became serious, they were reluctant to use those funds to save UST and ended up crashing both LUNA and UST in the process.
My understanding was they had some funds, but they just weren’t enough to cover the 11B supply of UST (ie: less than 11B worth of BTC, instead around 2B).
If there are 0 funds then we are all screwed regardless of whatever proposals are made. If however they do have 2B or so, I think my proposal will work.
I don’t think so. You cannot have a stablecoin backed by an unstable asset. It is doomed to fail.