Ustc : regulated parity proposal

Governance & Proposals
1

USTC STABILISATION BY REGULATED LEVEL.pdf (95.7 KB)

Summary
1 to 1 USTC/USD parity is not a need. Stability is the need.
We propose to stabilize USTC to aregulated parity with a parity hike strategy guaranteed by a ratchet effect.

We believe stablecoin users look for:

  • Stability as a store of value
  • Low BUY/SELL spread
  • Very strong guarantee of solvency (even more after what happened)
  • Liquidity

Advantages

  • No creation of a new stablecoin.
  • No mass minted tokens as the community mood is to see LUNC burned not minted.
  • No algorithmic coins as USA are planning to ban them.
  • No volatility as users look first for stability.
  • No abandonment to USTC and WLUNA members.
  • No collateral exposure to crypto volatility / crash.
  • Asymptotic trend for full 1:1 parity recovery.

Proposal
CHAPTER I : USTC STABILIZATION AT REGULATED LEVEL

Idea :

We don’t have to begin with a 1 to 1 USTC/USD parity.

Setting a 1 to 1 USTC/USD parity is not a need but Stability is the need.

  • Stabilize USTC/USD to a regulated value parity (can be 0.011* USTC/USD)
  • Sell oracle reserves to get collateral
  • Use USD only as collateral
  • Use the accumulated fees and margin to raise regulated value parity with a 1:1 USTC/USD target.

We believe solvency guarantees based on BTC or LUNC are not good enough.

What about the next BTC crash? Last events show us that selling BTC in emergency has accelerated its fall.

Only a system connected to real world can guarantee fiat USD from the real world.

Method :

  • Sell 300 B Oracle LUNC reserve && bring the 1 B Oracle USTC reserve .
  • Use the fiat USD cash as collateral.
  • Terra as market maker buys USTC at 1.0000 and sells at 1.0005
    • USTC buy orders are covered by capital reserve
    • USTC sell orders / mint increase the capital reserve

Collateral:

Showing the cash in banks is the best proof of solvency.

  • Collateral will be in physical USD only.
  • All USTC will be 110% collateralized.
  • Decentralized USD will be reached by Multipolarity: deposit in 30* banks from 30* different countries.
  • Countries must be:
    • crypto friendly
    • not black listed as money laundering
    • not at war.
  • Banks must:
    • have first decile rating by Moodies and S&P.
    • be independent from each other (can’t be sisters)
  • Collateralized rating will be public information.

Income

Income generated by :

  • Margin spread (buy at 1.0000 and sell at 1.0005)
  • Banking interest rate
  • Transaction to fiat money fees.

Income will be used:

  • Parity Hike
  • Operating cost

CHAPTER II : PARITY HIKE WITH RATCHET EFFECT

Idea : Parity Hike

  • Excess of cash collected from ta, margin spread && interest income will be used as collateral to increase the parity USTC/USD.
    For example, 0.011 USTC/USD will become 0.015 USTC/USD.

  • As we use stable collateral ratchet effect will be guaranteed.

  • Activation date should be two weeks delay after public information to let the market balance by itself.

Disclaimer :

The aim of this Message is solely to inform, and its content, for example in terms of financial analysis, should not be considered to be an offer, nor should it be seen as soliciting an offer to purchase or sell a financial instrument, nor as a contract in any form. Moreover, no guarantee can be given as to its exactitude, its comprehensive nature or its transparency. We ask that you seek advice from your solicitor or other competent professional concerning the content of this Message.

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