I will start with a small reflection:
The world of cryptocurrencies moves large amounts of money. But it has two problems, the first is that most of the projects are created by software developers, who do not know about economics and finance. And the second is that many investors do not know how to measure risk, in an industry that is in its infancy. They want to become millionaires overnight.
The only way to earn money is to work, save and invest, in a smart and diversified way (don’t put all your eggs in the same basket).
The first thing we have to understand when we are designing an economy. It is that it cannot have errors, you always have to think that the worst can happen and design a bulletproof system. Because design errors can make some millionaires and others unfairly poor, in an instant.
The economy is a complex system, no one will ever be able to control it. So to succeed, our economic system has to be much simpler. The economic models that seek to control all the variables end up being Ponzi. Where those who enter first benefit at the expense of those who enter last.
Before creating or investing in a financial instrument, we must ask ourselves. Where does the money to “earn” come from? If the money comes from a limited source, at some point it is going to run out. When that money runs out, the investors will leave and the project will die.
If money comes from an unlimited and inflationary source, over time there will be more and more money, making it worthless and less. Harming all holders (Look how the purchasing power of the dollar fell over the years).
Money needs to fulfill 2 things, to have value. Be limited so that people want to use it.
I believe that there is enough interest in TERRA, so that one of the two requirements, we have solved. What we need now is to formulate how to make LUNA something limited, without harming or unfairly benefiting new and old holders. So I think it’s best not to replace existing LUNAs with a new token and arbitrarily assign who gets more and who gets less of the new token. What you have to do is: stop the moon emission and burn the surplus of LUNA, until there is a much more reasonable supply 1B or less.
Some of my proposals to burn LUNA:
• Artificially raise a high value, transaction fees and burn them as ETH does
• Obtain financing and repurchase part of Luna that is in circulation to burn them.
• Create some kind of market, it can be artistic NFTs, where you can use the moon and burn the proceeds.
I leave room for you to propose more ideas on how to burn, without taking the LUNA out of the current holders.
On the other hand, I want to propose investment alternatives for those who want to stake LUNA:
To do that we have to understand that the rewards have to come from a real source of income, which is not inflationary. I propose that LUNA pays dividends, we can use part of the income from the terra foundation to pay these dividends and that the other part of the income continues to be used for development.
A system of collateralized loans can also be created (if it does not already exist on terra). So holders who invest LUNA receive interest for lending their money.
Finally, I wanted to talk about how to repair part of the losses that UST holders suffered:
I think UST should be thought of as bonds that need to be restructured and a fund created to repurchase those USTs (probably at a price of less than $1). And remove them completely.
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