Whatever rescue plan for UST will come into effect - the projects on Terra need a stablecoin to survive. Saving and pegging UST will take at least another 3 weeks (unbonding remaining LUNA will trigger next capital flight and there is not near enough collateral for existing number of UST around - so that will be forced to shrink further - by a lot).
Suggestion is bridge USDC into Terra and have it on Terra station/Astroswap etc, so projects and the L1 has a chance to live on while UST is being rescued. Why USDC? Fully regulated stablecoin. Central but at this stage safest. UST’s claim for a decentralized stablecoin can live on - but will be given some time to materialize.
Yes. I know people will hate it since it goes against the bias. Not liking it myself, bias-wise. But time for a reality check. And not saying this will be a permanent solution. UST spread to different chains. Why should Terra be “UST-only”. Don’t see UST stabilizing before staking unbonding finishes. How to bridge until then, safely? Can’t collateralize 12B marketcap UST with 2B BTC
Not against this for a stabilization fund because this is for emergency use only, and only during depeg to stabilize the peg. Don’t imagine we will have $13B of stabilization fund to cover $13B UST so using a basket of stable assets and stable coins for stabilization is fine with me. We can always choose to vote what is the next asset to buy and offload overtime. We’re in an emergency situation. A mixed basket should be fine. UST+3Pool is a mixed basket. It contains USDT, USDC, and DAI so why are we not fine just for a little bit longer? 4Pool may be coming soon. It could give us a temporary breather until the next attack with more UST than 4Pool has to restart the spiral again. The best way out every time depeg happens is unfortunately letting bad debt go. We can’t save them.
This is a proposal to clear bad debt to try to save everyone else.
In case you haven’t noticed - validators are already shutting down. Some saying “1.5 months more”. Not a question if UST “as it is” is dead. It is. Validators are like Oxygen for terra. Getting rare quickly. If you can’t incentivize them to stay - the circus stops.
Question is: will the new UST version even have a chance of starting up and if so, how. USDC as intermediary patch - whatever it’s name (Who cares - tUSDC or anything if it has to be wrapped).