[Proposal] Comprehensive Go Forward Proposal

This will combine several ideas that many people have already put forward, and combine my working knowledge of how bankruptcy works, under the general assumption that UST is a debt-like instrument, given it was billed as “safe”, that 1 UST would always be equal to 1 dollar, and supposed to be backed by $3.5B of BTC. I am also assuming that LUNA is an equity-like instrument, given it would absorb the volatility to maintain UST, and no guarantees were made regarding its price.

First, I think @FatMan 's proposal is a good idea. Anchor was marketed as a safe savings account, and if you can make the vast majority of UST holders whole (including ~99.2% of Anchor wallet holders), I think this will improve sentiment and rebuild trust which will be crucial for any future LUNA has. For more details, see below.

Now this proposal doesn’t address what to do if LFG or @dokwon either don’t have the bitcoin/funds or are not legally obligated to use the Bitcoin to make people whole. Now whether that constitutes fraud given we were told $3.5B bitcoin was going to back UST is a different question, but @wlawyer (@wlawyer2) seemed to think even if there is BTC remaining, that Jump Capital may have a claim on the BTC and there is no claim on it for UST holders.

I propose if this isn’t funded by a LFG or a potential white knight (CZ Finance and Vitalik have been supportive, although not stepped forward to provide relief as of the time of this post), that it is paid with existing swap fees (wallet address here: Terra Finder). These are paid out as APY to LUNA stakers (for details on LUNA tokenomics, see: https://twitter.com/pedroexplore1/status/1524216974611517443?s=20&t=8UGosjeZHobrMDw-jm7f6Q).

Any UST holders not made whole can then be given 3 options.

  1. lock up UST and have it repaid over time with a percentage of future swap fees that are used to buy USDC/USDT and can swap out 1:1 over a time period until everyone is repaid in full.
  2. convert their UST into equity whether that’s in the form of LUNA or a fork token.
  3. sell UST on the market, which is currently trading at ~$0.18 on the $1.00.

Once UST is repaid I propose it is burned to retire it. Now, if UST is burned or locked up, this could support a bid on exchanges, by decreasing the liquid supply, and allow LUNA or a fork to move forward discharged of the UST liability.

So what happens to UST holders not made whole and LUNA holders? Well this is where it likely makes sense to fork after making a good faith effort to make the majority of UST holders whole. UST holders who are not made whole (whales), and LUNA holders would get a new token (equity-like) in whatever the new fork is. I believe a fork is probably cleaner than LUNA currently is given people’s equity was severely diluted, and you need to make sure builders and the community who made Terra what it was have a part in its future success.

I am not a developer, so I am not sure what that would look like, but it could be something similar to @dokwon 's proposal.

I do not want to propose a concrete allocation, but hypothetically, it could look something like:

~30% to UST holders not made whole or who choose not to participate in the lock drop to retire UST
~30% to LUNA holders before de-pegging event
~20% to builders to incentivize them to stay and create value (the chain won’t be worth anything if nobody continues to build)
~10% community development fund
~10% to LUNA holders after de-pegging event

I believe the key focal points are:

  1. Make small wallets as whole as possible. It is crucial to rebuild trust, if LUNA or a fork chain will have any chance of survivial. It has been really sad to read about people committing suic*de who put their entire life savings into anchor.
  2. Give ownership to builders to incentivize them to stick around. Otherwise there is no value in LUNA or a fork.

Lastly, if you want a solution, I encourage everyone to put pressure on developers, validators, influencers, and Terra backers to commit to building and to finding a solution. If not, projects will likely slowly move to other chains, and we will be completely abandoned and left with nothing.

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There is no way to easily compensate people. The existing must be saved. IF you FORK you may as well stick a fork in this project and team. All respect and confidence will be GONE.

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I am not against saving the current project, but how do you distinguish ownership in LUNA between people who spent $1,000 and got 10 LUNA and people who spent $1,000 and now own 1,000,000 LUNA?

Combining these two proposals would be for me the best way,

AND

Compensating UST holder fast + burning LUNA fast with emergency burn tax to restore equilibrium.

Then the revival proposal to go to a luna v2 can be considered in case of failure of the burn tax proposal.

Obviously, a lot of good ideas are emerging these days, this is very encouraging people ! Hang in there !

That’s the point, there is no way really. Who’s going to go through the entire blockchain and do that? The best solution is an announcement and encourage all to avg down.

Maybe the Team pull some from the market and reserve it in Treasury to work with certain folks on a case by case basis.

But either way it’s a much different conversation at 50 cents or a dollar than right now. Now it’s impossible… If LUNA runs so with UST. Then people can be restored within some reasonable parameters.

The reason the validators paused the blockchain was because LUNA’s collapse could cause someone to effectively buy so much LUNA, that they could effectively buy a majority stake and control the governance. The price hasn’t moved enough that this is still true.

Additionally, I think if you don’t change it, developers equity has been so diluted, that they currently have no incentive to stay. If you follow any of them on Twitter, other chains and platforms are courting all of them because we have some of the brightest minds in the space. The only reason I put forward a fork as an option, is to somewhat make 99% of the community pre-depeg that was severely diluted continue to have ownership and a voice in Terra, without have to invest additional capital.

There is absolutely no way you can find a fair point. If you aim for the people who bought after the depeg you are literally dunking on a lot of people who bought at 90, 80, 70 as it was falling down to DCA. Those also lost all their savings yet they are thrown into a pool with people who bought for pennies and have 50k++ times their coins. Any redistribution you try to do will never work, the only way to make this is just let things be, make an announcement and let people start buying coins already then buy and burn yourself. Those who lost still will have time to jump in, specially if you find a way to notify previous LUNA holders beforehand so they get a prime extra time to buy before the madness begins.

I genuinely think this is the only solution to fix this. Any kind of proposal that involves compensating people is gonna fail due to the nature of the events. There’s just too wide of a range where people still lost 99.99% of their savings by investing. This would only protect the whales and that would mean the death of the entire ecosystem as people would just dump and run due to the unfairness of the situation.

Sometimes, the roughest solution is the best solution. It’s gonna hurt to those of us who had the coin at high averages (80ish was mine) but any other solution will just straight kill those of us that were actually still around to see if we manage to comeback somehow.

Give it a thought.

2 Likes

If you don’t make an effort to make good on one UST = $1, then I think LUNA’s only option is a meme coin. There is no value in a stable coin that isn’t stable, and everyone who’s been burned and who built the Terra ecosystem into what it is will have no incentive to stick around, especially developers who were creating the value in this ecosystem who may not have the capital to continue building and can’t just average down. They’ll just leave to another chain.

And then LUNA will just be a meme coin, because nobody will want to buy UST, and no developers will want to build on the chain.

Remember that fork will destroy all credibility that this project has. It won’t be listed on Binance again. Is this what you want? I say lets salvage the situation and come back twice as strong :muscle:

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Guys , our money is gone. We aren’t getting it back. We need to figure out how we can hold Do responsible by having him sent to prison. He must pay with MANY years of his life , we must not let this scam artist off the hook. He will start a new project under a fake name like he did with his project before Terra , he has to go to prison.

I agree. Provide liquidity via a BURN tax on every transaction. The speculators are in full force and daytrading insane volume. Making big money on the crash. a small transaction fee to fill the coffers would not be a bad idea.

@HelloThere

  1. For LUNA to go back to $1 with its current supply, the market cap would need to be $7 Trillion, which is 7x the size of the ENTIRE crypto market. I do not believe you can tax and burn your way out of the current situation

  2. Since we minted so much LUNA 99% of the community and developers who built LUNA into what it is have been so diluted, that their stakes are worthless. How do you incentive them to stick around under the current system?

  3. I believe if there is no good faith effort to make UST holders somewhat whole, then LUNA has no value going forward. Even with all the dApps (which good luck getting developers to stay with no equity), what is the point of a project that built a stable coin that isn’t stable?

@Jeffry_Jacobson

That is a separate question for lawyers, and legal authorities to figure out. I am trying to put forward a solution to salvage any remaining value.

YES!!! You are dead on. Can’t fork, can’t reasonably compensate anyone.

ONLY solution is fight and buy and burn. The momentum bots are working it higher as well as some hopeful buyers, but many are traders and will be out with small profit. Who cares how much someone makes on the way up. Encourage ALL to buy while it’s cheap and everyone can make money where they have lost.

Can’t retool or fork your way out of this mess. Time to show strength and commitment to all that have believed along the way.

Dude , it’s over. Trust me , I wish it wasn’t. We aren’t going to recoup any of our money , the terra Luna name is a joke. Time to mail Kwon and get him locked up forever.

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Going after Do because you are angry doesn’t help anyone, especially yourself. Best solution is a rapid recovery. We are all frustrated, but I do not believe he had any malicious intent.

His communication during this thing has been beyond awful. Where did the bitcoin go ? Why the delay in explaining where billions in btc went. Would you have invested if you knew he’d tried this exact project before and it totally failed ? Do you like the way he talks to people and calls everyone else poor ? He’s made a ton of money from this scam while we all lost ours.

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Yes, sadly I don’t think he will be held accountable.