I’m in no way an expert of any sort but I just had some ideas… Please do not bash me and would appreciate your thoughts on it. Experts please have a look! Thank you for reading my dumb ideas >.<"
To ensure UST has value, there MUST first be value to Luna. UST maintains its $1 value through Luna. In that sense, the overminting of Luna to defend the peg plus heavy sell pressure from the market has removed most of Luna’s value. Which also causes UST to be worthless.
In my opinion, the overminting led to a supreme disequilibrium between the supply of Luna vs UST. Luna supply is just too much.
Burn both Luna tokens and UST. Burn more Luna preferrably back to its original supply before the depeg while burning a few hundred million or few billion of UST.
This would maybe help to bring the supply of Luna and UST into equilibrium. So that there will be lesser Luna and probably higher prices. While doing this, maybe its possible to repeg the UST based on Luna’s value and allow market forces to do its job.
While all of these are happening, there shouldn’t be any more minting of USTs and Lunas.
Basically, we just burn both the UST and Luna supply and disable minting while allowing the market to do its job.
Similar to Idea 1. But we should change how the stablecoin UST works. Instead of deriving a $1 from Luna, maybe $0.5 should be backed by Luna while $0.5 is backed by real assets.
Real assets: Holding USD reserves, debt securities, etc.
Or the UST could be backed at different ratios as long it includes actual assets and also Luna. Then we will probably have a stablecoin again.