UST holders compensation proposal and formation of UST DAO

The aim of this proposal is to provide a fairer solution for UST holders, as existing proposals for “recovering” LUNA and UST are undermining UST holders.

If we assume that LUNA-v2 would reach 5B market cap, and UST holders will receive 25% of 1B LUNA-v2 supply, it means that UST holders will receive ~10c value for each 1 UST. (250M LUNA-v2/ 11.8B UST * 5$ = 10.5c). And most of this sum will be locked for 2 years.

UST was being promoted by many entities as a stable coin with 1 USD peg and many UST holders expected this to last, thus not selling their UST. Thus, we deem UST holders as the official creditors of LUNA-v2 or any subsequent forks of the project.

This current proposal is not contradicting kwon’s proposal or other proposals, but is built on top of it with more impact on UST holders.

UST DAO Proposal:
To recover value for UST holders, ‘UST DAO’ needs to be constituted, so it could manage the ‘UST DAO Recovery Fund’. This fund will be distributing any recovered funds to the UST holders using FatMan’s proposal principles (small holders first)

UST DAO Recovery Fund will have the following sources:

  1. Develop an industry-wide mechanism with participation of everyone to take fees from any for-profit transactions (like swaps) on operations with LUNA-v2 network on DEX, CEX and other DeFi services (see below). Suggested fee is 10% of the standard fee taken by the service.
    Alternatively such fees could be built in into tokenomics of LUNA-v2

  2. Voluntary donation program from the entities which profited from UST driven business, Market makers, exchanges, staking platforms etc. Ideally sum of all moneys generated from UST business stream.

  3. Any winnings from the litigation efforts by the UST DAO legal services against entities which unfairly profited from the UST depeg and the following LUNA collapse (see below). As this can qualify as predatory actions targeted towards retail savings.

Maximum value of the fund is the sum of all received valid claims for the UST. Fund shall be managed by a regulated custodian and must adhere to strict spending policies. There needs to be a supervisory committee which will include all stakeholders, major exchanges, market makers, etc.

Next steps:

UST DAO would need to be represented by a real legal entity so it can implement points (1) and (3) of the proposal. It is possible to get recognized as a legal entity for the DAO if it is registered in Wyoming, Singapore and other jurisdictions.

Then UST DAO would be able to use legal/litigation services to pursue an official Creditor Status allowing it to pursue the collection of the due funds.

Litigation efforts would require some initial capital to formulate a case.

Proposal is to use the existing LFG Fund for initial capital formation. All funds which would not be required for legal services would be used as initial UST Reserves Funds formation.

If LFG Fund would not comply with this requirement, actually the first legal case could be made to obtain control of this fund.

Approximate amounts for the initial litigation efforts is hard to predict, but probably would be less than 2% of the LFG funds; and the rest would be directly used in UST Reserves Funds.


First, I support the fork, in addition to supporting classic options. I support the fork with the following amendment (though that can be a share of community pool after): changing the snapshot date for aUST holders to “the real doom/rekt point” : Pre-attack aUST holders: Change reference date

My main reason for supporting the fork is that UST cannot continue to serve any original purpose/vision. Proposals like yours apply to v1 UST, and obtaining value for it.

There are lots of USTclassic valuation possibilities:

*mint lunaC to reward past/present UST holdings
*offer put warrants at various price points that allow for holder to buy (minted) luna at a UST price point. These warrants priced in UST would burn UST on purchase, and burn UST when redeemed/called/put.

  • give UST holders automatic rights to exchange for 1 luna/ust. Allow minting of UST with luna burn whenever market value of luna is 2 UST (per luna double ust market value). That minting power can be a UST Dao power/option.

great work

Structuring the UST community as a DAO would be a great move - it would allow the UST Community to establish themselves as a decentralized organization which would allow it to take legal actions.

What matters, is to safeguard the community and the community interests, and take actions as a whole. Having a unified approach towards any actions taken and making sure that the DAO maintains a significant level of decentralization so it has the credibility to seek damages.

We were approached by our member who around a million in UST, and we are looking into what is to be done to claim the damages.

Registering the DAO in Wyoming requires drafting some legal docs, passing checks, etc. If this is the way forward, we can help by drafting those documents and carrying out the whole registration process.


hi keep us updated on this DAO

with you

Totally agree with this! Great ideea!


Guys please count me in for any legal action that you going to prepare. I have lost over £10k in UST and £700 in luna and won’t let Duo get away with my money. Yes I bought UST after the depeg but there is no way on this earth you can panalise me for that as once the depeg started instead of letting ppl carry on purchasing ust and luna he should have halted the trading but instead he kept on making false promises that everything going to be alright.

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Brilliant idea.

That’s a great idea, definitely backing it

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I have +3mil in UST. Im definitely inclined to pursue all available options at redemption to the hilt.

Once the DAO is setup, count on my contributions to help fund meaningful legal action to get all UST hilder made whole.


Hey there, I am still looking into doing this but on Discord I didnt get much support as people are influenced. If there are members interested in this, let me know, and I will open a space for us to discuss, and can provide access to lawyers who want to take part in legal actions. I am here to help with whatever I can.