I’m not here to discuss or judge big bosses work. They brang to life this beautiful ecosystem as they let it burn without doing the necessary to save the investors who believed that things will be fixed quickly.
But people here is not focusing on the root problem imo.
So why did the death spiral happened?
Because big whales dumped ust somewhere, panicking retailers and causing liquidity outflow (bank run) and luna uncontrolled minting (which is stopped now). Everything happened too fast, trust went lost in a few days.
Please tell me if I’m saying something misleading or I’m making it too simple, but working on Lunc burn/tokenomics is not the only single solution to regain trust from new investors. I think we need to attract liquidity working also on USTC.
Now I want to make an analogy with Pos governance: the more stake = the more decisional power on proposals.
In ust context, big whales had the RESPONSIBILITY on maintain the peg. They didn’t, so we need to regulate them in order to prevent another potential death spiral in the future. We also have an historical pattern and a time frame in which bad things happen without any kind of regulation.
So here’s my question: is there the possibility to intergrate a system embedded in ustc which affects only big wallets in proportion of their holdings, making them unable to sell big amounts in just one transaction (or letting them distribute big sell-offs in a matter of weeks)?
I agree with most of what you said, except the part about regulation on whales. People came to crypto running from unfair regulations from governments. Market shouls decide if they want to sell or keep. What we can do is to increase use case of ust.
If whales just won’t invest, should it be a good reason to give ustc a fair distribution between retail users, making liquidity inflow/outflow more organic?
And my idea was not just limiting a single transaction and let them possible to make another one immediately after. The rest of the funds should be kept vested in such a way whales are disincetivized on depegging ustc, because they are still owning liquidity in ustc and need to act carefully in order to not lose its value.
Or another idea could be taxing whales when ustc’s wallet distribution holds a potential risk for the ecosystem… but i don’t think this feature can solve the problem on its own… can help instead.
Obviuously, any kind of tax or vesting rate should be dynamic and added reasonably in proportion of whales holding, and as I mentioned before, we have and historical pattern in which the death spiral had its course, so smart minds can extrapolate some useful data to put in the base regulatory infrastructure , making the ‘next worst case scenario’ less shocking.
Why not peg UST at 0.01 cents? there is no difference, and might even be better to be pegged at 0.01 than at 1? the original dollar is also pegged at a debt, think about it…
I don’t understand your statement, sorry.
It’s obvious that there’s no difference, the problem is not the price (we can peg ustc with actual shiba inu price if we want) but who guarantees that another bank run won’t happen again once arbitrage is reactivated?
Said that, since ust was meant to be 1$ as a stablecoin, let’s keep that. Out there some people holded ust so they owns a debt to the ecosystem that need to be payed back restoring the peg (how? i dont know), others (now whales) maybe saw an opportunity, shorted ust and accumulating at low price.
The fact that ust should be pegged to the dollar which is pegged to a debt as you said, scares me too, but traditional banks limit innocent people’s withdrawals when they’re out of liquidity expecting for a bailout payed mostly by other innocent people, i think. So why not create a fair system to that problem? THIS should be trustworthy, because money runs on trust and Luna/ust was unregulated and too small compared to traditional arbitraged money…
Whales simply have the responsibility to not depeg, if they want gains and volatility and move funds easily let them invest and speculate on lunc. Ustc need to be runned mostly by smaller transactions in an organic economy. It’s more difficult to organize millions of wallet to make depeg than a few ones
I’m not technically prepared to jump out with precice numbers so i’m making examples now.
If whale #1 holding 10B of ustc have the possibility to sell only 1/4 of funds, 2,5B maximum sell-off can still make a shock on peg price but other 7,5B are vested for 1 week (here i’m thinking about the volatility period after depeg that lasted 6-9 days, not lmao). This discourage whale #1 on making such a quick move because he doesn’t know if the price shock is compensated by retailers while 3/4 of funds is freezed. If everything went good, after a week whale #1 (maybe he becamed #3) is allowed to sell another 1/4 of the remaining 7,5B.
This limitation goes over as we go down on the ranking list of whales until reaching a threshold where a wallet could be considered owned by a retailer.
Or maybe we can include whales in different regulatory zones based on their balances.
I don’t want to sound like a bigot. Tera having unlimited minting Capabilities pegged $10 billion seems like a plan to fail, $10 billion, each year becomes an internally small amount. pegged to the USD means inflation by regulators is a sure thing. Surely you would’ve had a market cap for the Luna-C coin an exponential growth of the dollar but I’m not a economist or a crypto analyst but I’m not silly either.
Also can anyone tell me how many active nodes there are on the tera chain please, Is LUNC even layer 1? I feel if you could repegged the dollar even with all the major changes that do need to be done, If you could add at least 50% of voting rights to a proof of work protocol and keep the creator from CEO duties you could be as big as bitcoin
As far as i know, minting is stopped. Lunc max supply is 6.9 Trillion. No more inflation here.
First problem is reducing risk of death spiral. Luna hyperinflation was a consequence of ust depeg caused by whales so lunc burn issue comes after imo.
In other topics users discussed on
how to burn luna with taxes applied on transactions, making it deflationary and restoring peg
the future of leadership and other things
It seems you’re pretty new on crypto so I please you to dive more deeply in the forum to gain information (or go on youtube) and choose the right topic when asking questions about blockchain infrastructure
