Why not peg USTC at 0.01 cents?

Why not peg USTC at 0.01 cents?

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? 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, upward demand would give the extra 1.25 Billion of new market cap

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 trust of people is lost, it is necessary to return it. It’s like they tell you that a bill of 100 bucks now means 10 bucks. And everywhere they will ask for 10 bills of 100 bucks: D Will you continue to work for bucks? and listen to fairy tales :slight_smile: Or go to work where they pay normal 100 euros

I agree with you, but I also know that the Crypto space changes radically each cycle, in the next cycle people are not even going to remember what happened and if there is a coin that is pegged at 0.01 cents to USD and is not moving for the past 1 year they are going to gain confidence and buy-in… and my proposal is to overcollateralized, that would be our safest bet to regain the trust of those who lost it…

3 Likes

Same as the others, I think this is a bad idea. Stablecoins are all about trust, ie trusting that whenever you want to exchange your tokens to something else, you get the previously promised amount of money.
If we now change this promise, it creates dangerous precedent: The next time there is a de-peg, people could be saying “hey, our stablecoin fell 10%, why not use the current value as the new target value?” and then it’s not a stablecoin anymore.

your proposal is realistic, easy to be implemented and good for the ecosystem of Terra 1.0. Stablecoin should exist for the chain.

2 Likes

Proposal and vote,plz

ok, after we fix USTC at $0.01… who gonna hold it? why they have to hold it? it’s not going up or down, zero profit and there are a huge risk that it will be repegged again at $0.001…

are you willing to hold it?

1 Like

dashboard lfg org still show 1.85b ust reserves. Need more burns.

Right at this moment, LFG org can buy 90% of the whole MKT supply using their reserves, it’s a click of a button…

is getting easier by the day for someone to do that, the real problem is, we have no more devs working in terra classic development…

That is what a stablecoin is supposed to do. Hold it’s value and not increase, or decrease. It’s not an investment, it’s a savings account.

This is correct. USTC needs to be repegged at $1 any new amount and you loose complete trust. It opens the door to be misused further.

Who will hold the funds backing the peg? TFL, LFG, Do Kwon? No way. We cannot trust them with our money. Unfortunently there is no orher entity currently available to do so.

We should create a new entity then and quickly, it is getting easier by the day to put this plan into action, the market cap of USTC is getting lowered by the day, and the risk is if we wait too much then USTC will probably be de-listed of the main exchanges because there will be no utility…

We should create a new entity then and quickly, it is getting easier by the day to put this plan into action, the market cap of USTC is getting lowered by the day, and the risk is if we wait too much then USTC will probably be de-listed of the main exchanges because there will be no utility…

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My biggest fear is that USTC is going to lose utility in the next months, it will be de-listed from major exchanges… devs are not active,

this proposal would work to stabilize the whole network as it is, automatically would give utility to Mirror protocol classic…

I think we should hard peg LUNC to USTC at the current 140:1 ratio using the same mechanism that used to be used to swap for $1 equivalents of each. This will breathe some life into USTC.

There will be opportunities to arbitrage the difference in price on CEXs. This increases transactions.

As LUNC market cap expands so does USTC. I’m calculating USTC would repeg when LUNC roughly equals $0.014. This gives people some hope until a permanent peg mechanism is developed.

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I do not think we should try to repeg it to $1, that would do more harm than good, tremendous volatility to do that, a stable coin should be stable, does not matter the level, I think we should forget the past here, and work with the current price, the next psychological level for repeging is 0.01$

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This is a great idea. We need a stable coin. I say we peg to 10c. The buying activity will be HOT and the MC of lunac can support it.

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The tokenomics logic in the proposal is sound, we need some developer to look at this… time is flying and nothing is happening around USTC we are virtually pegged at 0.01 even without any policy, imagine if we had these policies in place… price at the moment of writing is 0.009766 with a market cap of $100,146,458, I think with some police put in place for LUNAC the community can raise the capital for this plan… and easily…

Just to clarify the plan/proposal:

"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, upward demand would give the extra 1.25 Billion of new market cap"