Intent redirect Lunc burn tax to buy and burn USTC. to bring USTC back to a dollar we need to reduce the supply that is the major issue there is way to much outstanding bad debt. considering the idea of reverse split does not sit well with community I believe this is a good alternative.
At current USTC prices you can retire 1 dollar of bad debt from between 2-3 cents of Lunc. any deviation below 1 dollar should be considered retiring debt at discount considering it takes 1 dollar worth of LUNC to mint 1 USTC when algorithm is turned on. if the price of USTC is 90 cents. The blockchain can buy it back and burn it for 90 cents of Lunc.
Keep minting of LUNC permanently disabled. enable minting of USTC when price is above 1 dollar. raise Lunc tax to 1 percent. route it to buy USTC through a Dex and send the ustc right to the burn address this will act of sort of market maker although it won’t be able to keep it fixed 1 dollar perfectly but it would prevent death spiral and hyperinflation of LUNC. This is simple low risk idea.
“I dont see any downside to it” ofc neglects that you reduce the amount of Lunc burn - or the other way around - increase the tax users of the chain have to pay (which is a downside, yes!), but in general I like the idea.
there is always some positive and negative to anything in life. why is low risk not possible to death spiral lunc again we already had higher tax dropping it didn’t increase on chain volume when the tax was implement it just stopped all the wash trading. Lunc burns we will never actually burn a meaningful amount at this rate if we can get ustc to 1 dollar it will burn lunc allot faster. if ustc is 1 dollar and we are burning ustc we have to burn lunc just to keep supply of ustc the same.
I would vote for this so hard. Helps take LUNC and USTC out of circulation and see minimal downside. Would only suggest a 4-6 months timeline to re-assess and require an additional vote before the time lapse to continue for another set period of time. Thanks for the idea OP!
My only question is what would stop USTC from being de-pegged again like it was originally? We don’t have a treasury of BTC to re-stabilize the ecosystem, as far as I know.
just one piece of the puzzel at this point. ether we reverse split ustc make lunc to ustc half burns half buys btc to collateralize it make ustc redeemable for 1 dollars of btc or lunc. reverse split doesn’t seem popular though. another idea making on chain staking for ustc with a lockup period of say 14 days pay interest for ustc oracle once also works again and make it loanable