ustc even lunc has no future if you don’t change the algorithm to restore the ustc peg. if ustc does not recover the peg these tokens have no purpose to exist as no one will invest in a stablecoin that is not stable and if no one invests in it the ecosystem is destined to worsen. therefore ideas are required to restore the peg, if we want the ecosystem we have to intervene on the algorithm. otherwise we will lose here too few investors who have invested in the ecosystem in the hope that development will find a solution
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I think you already understand what’s going on: LUNC/USTC have no purpose to exist. Follow LUNA, or other coins… but the Terra ‘classic’ coins have been placed in hospice.
not so, if it does not change it has no purpose, investors are betting on a possible change that for now is not seen on the development side. luna without ust and as another token among 5k tokens in the crypto industry with no purpose!
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Take this information with a grain of salt - There is talks on twitter that DK is already working on the new "StableCoin for Luna 2.0
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That is not true, USDN (Neutrino) that is collateralized with WAVES and other bonds token like NSBT, suffer a similar attack and it can be solved. New team should investigate how WAVES solved it. A important step to it is increase pool on Curve finances like 3pool and incentivize investing.
Related to avoid a attack to lending platforms is necessary to limit borrow quantity and avoid massive withdrawals of the contract.
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Sounds like joke, UST 2.0
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dk, he has lost all credibility, no one would give him more credit, the only way is for the luna1 community to change the algorithm. there is already a well running car you just have to start the engine and it would start running again
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I don´t know why you tell us that it seems a joke, if its backed up, why not another stablecoin?
How about create a USTC staking mechanism with the following requirements:
- Users can deposits their USTCs to earn interest;
- Interest will only be paid when 1 USTC = 1 USD, minting new USTCs;
- Who withdraw his money when 1 USTC is bellow 1 USD won’t receive the interest.
It will reduce de circulating supply of USTC without immediately minting any USTC.
The best way to reduce circulating supply - burns. (Oracle, LFG, contacts wallets.)
It’s stupid to wait for help from people who created new luna who left lunc and ustc and escaped, burn them all (lfg,anc protocol, ozone tresury, oraclepool,3rd wallets) think why they don’t share it transparently
Oracle pool controlled by our community, not DK&co.
Would it be possible to consolidate USTC 1:XX (on-chain) until we gain peg and then reactivate burn-mint mechanism to do its work with LunC and at same time make some stablecoin/BTC reserves for repegged USTC with new gained funds? Afterwards airdrop LunC to affected USTC holders as a compensation.
Guy, ustc holders don’t want any lunc airdrops. Just stop ustc distribution, massive ustc burns.
Use LUNC/UST RATIO as basis for market swap mechanism and repeg UST to $1 Proposal 10939
My proposal is pretty basic: Change the way the swap mechanism mints UST/LUNC. Normally the mechanism will require $1 worth of LUNC burned to mint 1 UST. and vice versa. However this wasn’t sustainable as we saw and is independent from the actual market price and therefore value of UST. My suggestion is to use the ratio of the total LUNC supply divided by the UST supply and have a swap fee whenever new UST/LUNC gets minted to burn off the current supply of LUNC.
Here is an example:
The LUNC supply at the time of writing this proposal is: 6,854,945,454,183 and the available supply of UST is 9,342,607,953
The ratio is 6,854,945,454,183/9,342,607,953 = 733.73
This means that for every new UST created a user would have to burn 733.73 LUNC. This equals a value of about $0.16 at the time of writing this proposal. The current market price of UST is around $0.03 at the time of writing the proposal, so the user would overpay. Similarly on the other side of the coin someone might try to swap 1 UST for 733.73 LUNC and would get $0.16 worth of LUNC. At a market price of $0.03 he would make a profit. Obviously this will cause the price of LUNC to fall to about a fifth of its current price to eliminate the price inequality, as otherwise users could just swap their UST for LUNC and sell their LUND through an exchange.
The reason for suggesting this swap mechanism change is that in case the USD-price of UST was to ever collapse it won’t cause more LUNC to be minted than UST is worth at the time. There is no reason why the mechanism should mint $1 worth of LUNC during the swap when 1 UST is only worth $0.03 to begin with (this basically caused the depeg to begin with). The LUNC/UST ratio will give UST the actual stability of a stable coin it needs in the long run, because both “assets” are priced proportionally to each other, by the functionality of the swap mechanism. The ratio itself does change based on available supply, however the changing ratio will automatically effect/determine the market value of LUNC not the other way around (as it would through a depeg).
Here are two examples:
Minting of 1 Billion UST: Supply of 6,121,225,500,000 LUNC and UST is 10,342,607,953; Ratio is: 591,84
Burning of 1 Billion UST: Supply of 7,588,665,500,000 LUNC and UST 8,342,607,953; Ratio is: 909,62
Now let’s say someone wants to mint new UST: Assuming the swap mechanism has been turned on, how much LUNC will a user pay/burn for 1 UST? Under current circumstances he will pay/burn 733.73 LUNC because there are 733.73 LUNC for every UST. Basically this means that the stable coin’s market cap and the tokens market cap will be the same (as it should be).
Now you might say: Why would we do this?
I would recommend a variable “swap fee” to be implemented whenever someone swaps LUNC for UST or vice versa. Basically we could do ourselves what the exchanges didn’t want to do and burn the pile of LUNC in the process. This would decrease the ratio long term and increase the value of LUNC. Whenever “bad debt” aka. UST is swapped to LUNC it would increase the LUNC supply in the short term but as a result of the swap fee LUNC will be burned off again, thereby reducing the debt once again. When the number of available LUNC increases the market price of LUNC will automatically fall so that no one overpays for the minting of UST. If someone mints new UST on the other side he will have to burn LUNC which further decreases the LUNC supply and when he wants to swap back he will pay again to receive LUNC.
Example: Let’s say we have 10 Billion available UST but we have decreased the number of LUNC to 5 Billion due to burning. This would mean that for every UST a user would have to spend 0.5 LUNC. If the LUNC/UST ratio falls even lower to say 0.1 it would require users to spend 0.1 LUNC. The burning of LUNC will happen whether UST or LUNC is minted during the swapping. The swap fee is only allowed to burn LUNC and never UST as this would increase the ratio and therefore act like additional “debt”. The market prices of LUNC and UST will be based on the market cap of UST as the market cap of LUNC would be the same as the one of UST as the swap mechanism is dividing by the amount of available UST.
The great thing thing about using the LUNC/UST ratio would be that even if the market cap of LUNC and UST is unequal in the moment it will always stabilise, as people will be able to exchange their LUNC or UST for a profit through the swap mechanism if they were to buy one of both on an exchange at an underpriced price, which in turn will equalise the market cap of both assets and cause users to use the swap mechanism instead of an exchange which would help burn more LUNC.
The Extremes:
Now let’s finally look at the extremes: Let’s say we burn all UST except for 1 remaining UST and the LUNC/UST ratio increases dramatically: What would this mean? It would mean that it would require all available LUNC to mint 1 new UST. If this was to happen it would theoretically cause the price of LUNC to drop to basically zero, or would cause the remaining 1 UST to increase to massive prices.
If there was a scenario where all or close to all UST was burned, it would require the entire supply of LUNC to mint 1 new UST. This may cause a problem to the swap mechanism at this point and halt the ability to swap from LUNC to UST. Again, the market will determine the price of both UST and LUNC at all points but as a result of the “undersupply” of UST at this point it is expected for UST to rise in price significantly to the point where it is worth it to spend large amounts of LUNC to mint 1 new UST or even fractals of 1 UST.
On the other hand if the owner of the only left UST was to swap for LUNC, he would receive massive amounts of LUNC. At this point there would be no ratio left as the ratio would divide by 0, which you know isn’t possible and the amount of UST that would be minted in a swap from LUNC to UST would be extremely low. This is similar to the depeg we saw.
Even though it is unrealistic that this scenario really was to happen, as it is unlikely that all holders of UST will swap their UST for LUNC at the same point in time and due to the fact that the market prices would adapt, I would recommend implementing an incrementally increasing swap fee based on the supply of UST. This would mean that it would incentivise users to not swap UST for LUNC if the available supply of UST is extremely low. If they still choose to, the mechanism would have to charge exorbitant fees and burn a large chunk of the amount of LUNC that would get minted or maybe even go as far as not paying out any LUNC in case the owner swaps the remaining UST, “seize” the UST the moment the user chooses to swap it and charge additionally huge amounts of “LUNC”.
Similarly it could also be considered to add a possibility for minting additional UST when the LUNC/UST ratio is extremely high as a result of an almost non-existing UST supply, to “reward” users that swap high amounts of LUNC for otherwise small amounts of UST. This would be an incentive to enable users to sell the additional UST they received at high market rates (through exchanges).
I am not a mathematician, so I don’t have an exact formula for when the swap fee should increase and by how much. Same applies to a possible “reward system” during times of low UST supply, but I am sure someone else that is smarter than me can figure it out.
The other option I would suggest is to simply mint new UST whenever needed to artificially lower the ratio to a certain point, or disable the swap mechanism from UST to LUNC during times of low available amounts of UST.
Now let’s look at the other side of the coin:
Let’s say all LUNC gets burned through the fees except for 1 remaining LUNC: This means it would require tiny amounts of LUNC to mint 1 new UST. This will theoretically increase the monetary value of LUNC extremely and cause the value of UST to stay the same or drop. At this point, the owner of 1 UST would be able to get small amounts of LUNC when he decides to burn his UST. Remember that the ratio works by dividing by the amount of UST. Therefore the market cap of UST determines the market cap of LUNC and therefore causes a price increase of LUNC the more LUNC gets burned.
It is important here to remember that burning LUNC might only make sense to a certain point simply because of the following: If there was no LUNC left at all after burning all of it, the ratio would be 0. It would require no LUNC to mint new UST and would therefore cause UST and LUNC to be worthless, as 0 LUNC would be minted during the swap from UST to LUNC and vice versa. Therefore the swap fee should be eliminated once the LUNC supply is low enough.
Assuming that the LUNC supply is low and the UST supply is increasing through minting (lowering the LUNC supply even more), the ratio will drop even more pricing LUNC at an even higher price. Assuming now that everyone wants to swap back their UST to LUNC, this will possibly increase the ratio exponentially, as the LUNC supply is increasing and the UST supply decreasing, lowering the price of LUNC and essentially causing another depeg, this is why it is absolutely necessary to implement an exponentially increasing swap fee when users exchange from UST to LUNC during extremely high decreasing levels of UST supply and possibly implement a reward mechanism for users that swap from LUNC to UST by rewarding them with additional UST, during times of extremely low supply of UST. This is done to cause the price of LUNC to increase longterm and stabilise the ratio longterm.
Final Words
During both worst case scenarios that i have presented it is always expected that users won’t swap the last amount of available UST or LUNC, as it would cost them too much. They could just sell through an exchange instead and buy the opposing “asset” that is oversupplied. It is therefore expected that the market will regulate itself through the price as it is traded on the exchanges and that situations like this shouldn’t even happen to begin with.
These two examples of “extremity” ultimately show one thing: The goal is to increase the amount of UST and lower the amount of LUNC through burning, to reverse the aftermath of the depeg. I want to point out however that burning too much LUNC might be a bad idea and in fact is what I believe the cause for the original depeg. Therefore “the ratio” might only be a temporary solution until the repeg is complete.
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Pegging to the usd is inherently unstable, because the usd is constantly inflated (devalued)… we need a new stable-coin design using the existing USTC in associating with Lunc.
1 $ Unless a stable stable coin is produced, bridges cannot be opened in the terra ecosystem, but the minted luncs must be purchased to produce this stable coin. When the bridges are opened, the software will start to burn lunc automatically. And the management will lose all luncs in their hands. The most logical proposal for him is available before stable coin is produced. It is to make an offer to reduce the supply of luncs, for example destroying all zeros from the luncs that everyone has
New here at agora so can’t make new discussion. So here is the idea which probably deserves own topic:
Discussion is brought up by a group of individuals, who all work in crypto space since 2016. We are not programmers. Our background is mainly from finance.
Disclaimer: we all hold Lunc and Ustc and stake Lunc with AllNodes.
Summary
Idea is to re-peg Ustc 1:1 to Usd, with progressive pegging without new funding. It comes with a cost all of us will need to take but this is what community driven project is all about.
Motivation
Re-pegging Ustc back to 1 Usd will help to bring back trust to this project and community.
Proposal
Right now staking rewards are bringing high returns in term of Lunc to those who are staking. Majority (us included) would be more than happy to see our initial investment gain in Usd price instead of gaining more Lunc. Because let’s be realistic majority already hold a lot of Lunc.
At the moment rewards are around 15%. Limit those returns to stakers at 8% and burn the rest. Yes we are talking about tax on staking rewards, which it seems is unpopular topic. This would gradually reduce amount of Lunc in circulation, which would most likely drive Lunc price up.
To get the funds for Ustc re-peg weekly mint (which stands at 10% of the burn right now) needs to be increased to 20%. 10% would stay for devs and 10% would go for Ustc buy back. Those Ustc would be burned right after buy back until supply is not reduced to 5b$. 5b$ market cap would also be a higher limit for Ustc until reserves are not build up later.
Progressive re-peg:
There is a lot of scenarios how to execute this. We believe that if Ustc burning takes place it can be pegged to 0.1-1$ (“lower peg” is what needs to be defended) two months after burning starts. After few months “lower peg” can be increased to 0.3-1$ and so on. It can be assumed that market (investors and traders) will do their job and probably keep the price well above “lower peg” if they will “know” what to expect in future. Once reserves are built (25% Busd, 25% Usdc, 40% Btc, 10% Eth) and supply burned to 5b$ re-peg to fixed 1$ can be done.
All in all this is idea that can become solution if we all do our part and without major investments. Stake with validators who would support this.
Burn tax on transactions stays (that would help burn both Lunc and Ustc and would be easier to defend peg). Community would also show to Binance that project is worth continue with burning.
Saving Ustc would also increase Lunc price.
About another hot topic. We believe swapping that problematic Eth for Lunc and burn it would be the best solution. No legal consequences and supply would be reduced.
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1st we need stop crazy distribution (ustc rewards for lunc staking) and start ustc burns (ustc burns much easier than lunc).
The U$D is unstable ~ why not create an ‘actual’ stable-coin?