USTC Incremental Repeg, Buybacks, Staking, Swaps

@bikyeo Please stop flagging everything you don’t agree with. It’s a waste of our time reviewing.


Who will implement this proposal if the L1 team does not cooperate with the coding for some reason?
Is there a second plan?


Change L1 teams. Another contractor. Too early to tell
It will require a spend prop anyway, with details to follow.

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when vote for this 。yes!

i think repeging should done very slowly and strongly peny by peny. not hard and fast. which will help to connect more people as well as getting more amount fees with less divergence percent. like 0.023 sent cost only 0.001 fees which is very neglegable. buyer and seller both are happy. then 0.025,0.026,0.027 penny by penny help people as well as create appropriate fund for easy buy back and easy to maintain peg.


While this proposal presents a set of trade offs that I’m not personally excited about (I’ve listed my own ideas here), it is sufficiently low risk that I would support it more as as signal that a shift in focus on USTC as a differentiating product for the chain is important.

Reasons why I don’t like these trade-offs:

  1. I hate taxes - nuff said
  2. Capital inefficient - I always liked the premise of a stablecoin which was backed by the activity/strength of its economy vs the value of its capital reserves. UST/LUNA grew too fast (inorganically) for its own good and suffered the consequences.
  3. Too slow - I don’t think this proposal really moves the needle for USTC or LUNC as the amount of transaction tax which would be required to recapitalize $11 billion worth of USTC seems like it aint gonna happen.

In any case, if the community is most likely to rally around this proposal, then I would support it.


@RedlineDrifter if you started a conversation with Binance, try asking them to send tax-burns instead of a burn wallet, to your (no-)liquidity pool. Otherwise, it will take a very long time to fill up.

We need $500 millions max.

I am not familiar with Tobin tax, but to my understanding, even before depeg, this tax isn’t supported by CEXs and only applicable on chain. While Divergence protocol relies on CEXs to implement the protocol and people willing to sell below peg to generate the funds for collateral, why would people sell below peg just to get cut and receive less? Then comes the question if so little volume will be traded below peg, how can we gathered the required fund for collateral? Won’t everyone just trade at peg and no increment will be made due to so little collateral will be collected?

Rather than incrementing peg by market trading price, taking (Total collateral amount) / (Total supply of USTC) as the peg for USTC is more measurable? So that it reflects the true value of USTC ( peg starting from 0? ) with collateral backing it and if markets in CEX is trading below the peg, the funds in collateral can always be used to buyback cheaper USTC in the open market on CEX, seller still receive the amount they choose to sell and buyer can profit from the difference from peg as collateral visible on chain in the collateral fund ensures there is the required amount to peg USTC at the stated peg. This will create the demand needed to support the peg on CEX and do not require CEX’s support to implement the Divergence protocol?

Alternatively, funds used for collateralizing USTC by utilizing idle funds in community pool? My proposal for increasing income for community pool for your reference. Community pool will be shouldering the risk being liquidity provider to generate the profits while providing liquidity for LUNC & USTC on chain, without cutting deep into seller / buyer and off chain support. Combined with unidirectional limited LUNC >> USTC Swap pool & staking / saving module, would this be more feasible?

I understand the staking / saving module tries to provide use case and demand for USTC, but this alone doesn’t provide enough demand especially with the history of how Anchor has crumbled, market confidence is a question.
Using BTC as one of the collateral in the basket is good as this is head of crypto market, but I am not 100% sure how BTC can be used to collateralize USTC as the price is so volatile, fiat backed stables gives market participants confidence, but then USTC is not truly decentralized money as it is partially backed by centralized money. Tho I agree that this is as good as we can get until there’s an alternative or maybe BTC becomes much less volatile that provides the decentralized asset to be used for collateral.

The swap mechanism ( mint/burn ) is the main reason why LUNC is able to achieve such rapid growth with all the dapps build on chain before depeg, but I am not sure if the community will accept the swap to be turned back on anytime soon…

Hi all, thanks much for your work. Will bidirectional USTC <> LUNC swap be restored in full at some point (perhaps in a tax-free band around the peg value)?

Questa la miglior proposta se non passa non viene fatta subito, non vedremo mai lunc massimi livelli


It is possible if a mechanism is established that prevents a user or entity with many tokens from selling everything at once making the blockchain unstable. I would also add a mechanism that disables minting in the event of a possible anomaly

But to get there, USTC has to have a strong enough backup pool.

First of all!

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Yes, of course. I think a dynamic liquidity pool of the kind mentioned for the monodirectional case in the proposal may do the trick.

The replies from the cexs will be interesting.
Gut_Daddy is rooting for a repeg plan

when proposal???

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@RedlineDrifter qui ne tente rien n’a rien
je vous suis

Yes, we meet to give this a proper chance at success.

Yes gr8 idea … yes for sure

Yes yes and more yes, perfect

The proposal is already post, go to vote YES

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All I see is this:


  • Recapitalises and incrementally repegs USTC back to $1USD over time without the need for minting, forking, reverse splits or external capital.
  • Reduces LUNC supply through the introduction of unidirectional swaps.
  • Reduces circulating supply of USTC through the introduction of USTC Staking/Savings Vault
  • Funds both the Oracle Pool and Community Pool
  • Targeted approach so only those that are selling below peg pay the fees

And I have no issues whatsoever. Especially the part where it also reduces LUNC supply.

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