USTC almost naturally pegged at 0.01 USD

USTC is almost naturally pegged at 0.01 USD

The motivation is to continue to foster the old network, seeing that luna 2.0 has no stable coin

Proposal

With a fixed ratio of circulating supply and locked capital valued in BTC, there is no difference, and might even be better to be pegged at 0.01 than at 1 USD? all the new market cap going in would be used to buy BTC, to collateralize the peg

the first stage is to fixate the price, and at the moment that would be 102,500,000 /10.25B = 0.01 USD

at the start stage, there wouldn’t be any NEW circulating supply until all the supply in existence is backed by USTC circulating supply at 0.01 to 0.10 USD worth of BTC, so over-collateralization, to do that only 1.25B new cap would be necessary,

keep in mind that the market cap would remain fixed so investors would have to put only the original
amount of 0.01 USD in BTC to have 0.01 equivalent in USTC, it makes no difference to investors as the
price would remain the same at the moment of buying and the moment of selling, ***the standard 0.2% burn fees in LUNAC and upward demand would give the extra 1.25 Billion of new market cap, ***

So instead of burning USTC, we would use the 0.2% to store and use this upward demand in the vault for the overcollateralization using BTC.

When the point in time comes where the ratio of 0.01 USTC to 0.10 USD in BTC, the stage 2 would kick in

the treasury would have 1.25 billion dollars worth in BTC and this money would be used to defend the peg in the future, remember that in the first stage the market cap and the circulating supply would remain static(no need to defend anything)

the necessity of stage 2 is due to allow an increase in circulating supply due to new demand to use USTC as investors gain confidence in the coin again…

in the 2nd stage, the market cap and the circulating supply would be allowed to run but always maintaining the ratio of 0.01 and that means that all the new USTC minted would have a backing of 0.10 USD in BTC,

From the beginning, USTC would be over-collateralized to approximately 1:10 and any downward BTC movement would be irrelevant, the upward movements from new cycles would be positive for the treasury, and the downward pressure would not be enough to de-peg only if BTC collapses.

I think it’s a good idea and at this stage, it’s only possible because the impossible seemed to have happened… where is Do Kwon to implement it?

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the standard 0.2% burn fees in LUNAC and upward demand would give the extra 1.25 Billion of new market cap

So instead of burning USTC, we would use the 0.2% to store and use this upward demand in the vault(treasury) for the overcollateralization using BTC.

That is the main take from the proposal… if you understand that you will understand the whole thing.

3 Likes

I like the idea of a lower peg. There is much less risk, and we keep the SEC off our back.

I think the peg could hold at ten cents, at a dime, for large transactions. I’m not adverse to a one cent peg, but a ten cent peg could attract a lot of whales to get in and out of trades with. But either way a lower peg is much less risk to the Terra ecosystem.

2 Likes

a terrible idea

BTC is a volatile asset and therefore is such a bad collateral (unless over collateralized), also everyone knows that BTC follows the Nasdaq, and Nasdaq has much more to drop given the macro situation, this would mean BTC falling to $10k (which is possible). That would make whatever we have in the vault almost half the price. Why would one even consider BTC.

Instead of using BTC, try and use USDC, USDT, or FRAX.

Another idea is to somehow find a way to burn the 10B supply to around 7B. This would form the trust of people, and it would massively help repegging USTC.

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Decentralization, I do not think you are in the right philosophy because it is a mistake not to, USDT and USDC are centralized by the US gov,

We are trying to defy the system and not to work with it… the best way to do it is using BTC because at this point is too big to fail…

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They use dollars to back up their tokens, dollars are securities from the USA thus they can seize them if they want to do so…

And yes BTC at this point is too big to fail, wait for the next bull and you will see it more clearly…

Talk about burying your heads in the sand. Jesus C

if is that so why you are here then, for LUNAC? luna is no different than other coins, what is different from luna is USTC, luna without it is a daaeed project…

I’m here because I’ve been using Luna/UST since May 2021 and lost over 6 figures in the crash.

Sorry to hear about it, I lost 10K, heads up though, everybody except the bears is hurting in this market conditions, which might be a sign that things will pick up soon for the bulls, I have been in crypto since 2016 so I have seen three bears, that is the worst of them. Hope for the best…

Worst macro outlook so far for the crypto market to deal with but let’s hope for the best, like you said!

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You want to peg to USD - hold USD reserves. Else maybe peg it to the Venzuelan Bolivar?

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please check out this proposal

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A similar idea popped in, let’s go guys, that lower peg can be explosive for the community, How to restore the fixed exchange rate between the USTC and the DOLLAR?

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