HOTFix2SaveTerra: Change the Peg

Summary
Easy patch to squash the attack.

Motivation
Save Terra.

Proposal
Change the peg on UST from $1 to 0.10 - stop the madness - fix the pool - change it back.

*I trust the experts here have more time & motivation than I, to think down this path & prove it’s worthiness (or not) with all the necessary data/visuals - and execute.

GodsSpeed

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Come on guys, somebody comment on this and take over the thread.

Currently, everyone is buying UST at a discount, using that to buy Terra at 1:1, and dumping on Terra. $1M USDC buys 2M UST (at 0.50). 2M UST buys $2M worth of Terra. Dump Terra, rinse & repeat.

Example:

Price of UST: 0.50
Price of LUNA: 0.01

1M USDC buys 2M UST.
2M UST buys 200M LUNA
200M LUNA buys 2M USDC

Rinse-Repeat-LUNA-DEATHSPIRAL

CHANGE THE PEG TO $0.10

1M USDC buys 2M UST.
2M UST buys 20M LUNA
20M LUNA buys 200K USDC

ARBITRAGE STOPPED

All right, you modify the exchange rate from 1 UST <-> 1 USD worth of LUNA to 1 UST <-> r USD worth of LUNA with r being lower than the current market price of UST. That should stop the UST burning/ LUNA minting process which in turn will stop the plumetting of LUNA’s price.
But that will drive the current UST market price to r, at most. And with the current lack of confidence, it could again slip under this new peg.

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I saw a post yesterday suggesting to lower the peg then slowly raise it until reaching 1 USD. Not a bad idea. But now that the chain is stopped there should be some more lines of action.

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