In concordance with Prop 44 “Burn all Seigniorage,” we’re proposing to initiate the burn of 88,675,000 LUNA from the Community Pool to mint 3 - 4 billion UST – contingent on the LUNA price at the time of the swaps iterated below. This will reduce the total supply of LUNA by 88,675,000.
Since the LUNA price and amount in the Community Pool has changed drastically since Prop 44, the resultant UST minted from the burn will go to the Community Pool, with the community deciding how much to deploy to bootstrap Ozone via a separate proposal once Ozone goes live. (Initially, the plan signaled in prop 44 was to use $1 billion to bootstrap Ozone)
This proposal will also leave 10 million LUNA in the Community Pool.
Due to the changes implemented in Col-5, where all on-chain stablecoin swap fees are routed to the oracle_rewards_pool for validators, TFL predicts that LUNA staking rewards (minus airdrops) will likely increase to above 10% after the burns have been completed.
The Execution Plan
TFL to Initiate a
CommunityPoolSpend Proposalto withdraw 88,675,000 Community Pool LUNA to the designated address:
terra10kjnhhsgm4jfakr85673and3aw2y4a03598e0m, a wallet dedicated to performing swaps for this particular transaction. This proposal will be submitted on Wednesday night KST, and will be in voting period for two weeks thereafter.
Swap all LUNA at the above address to UST over two weeks, initiating LUNA <> UST swaps every 800th block, equating to 520,000 LUNA minted to the equivalent UST every swap/800th block.
Return all UST generated from the swaps back into the Community Pool.
Following the initiation of the above, a separate, new proposal will go live once Ozone launches to fund it using the proceeds from the mint/burn of the 88,675,000 LUNA → UST at the discretion of future governance proposals by the community.
Please allow for open discussion on the proposal in the comments below.
An on-chain vote for this proposal will be initiated in 48 hours.