TLDR: right now we need leadership , and the last thing we should do right now is rushing into action without a clear plan. gather clear and implementable solutions and rally the forces!
without peg there is no $LUNA … let’s recover the PAIR.
in favor of buyback and burn
I have spent several hours reading all proposals on this forum and many diverse and interesting opinions. With regards to @dokwon proposal … i am not in favor … it seems to me that it is the easy way out and a rushed solution. That being said don’t be too harsh on the man as I do believe everyone is giving it their all. @wlawyer made a very good post today and I encourage everyone reading it, we need more good opinions and we should not rush the consensus in any way. Also a good read is the 8 step proposal by fellow economists … great work everyone let’s keep this up.
As for the rest, we need to make this space one of collaboration and for sharing valuable information. We need coherence, conciseness, and logic. Emotions are our worse enemies at the moment.
First and foremost I am motivated to write my own thread on this forum because I have seen some brilliant minds at play the last few days and I want to make sure that every good opinion is heard enough times before any decision/action is made. Also to commend all the efforts that I have humbly and proudly observed the last days.
My love goes out to everyone hurting right now and remember we are all suffering and mourning together. Every voice counts.
I believe there is no $UST without $LUNA and vice-versa, consequently, I believe the majority of people who truly believed in the success of this project held both assets, and when things came tumbling down … the more risk-averse of the bunch go out, quickly selling their $UST at a loss … and the more risk-seeking took a little portion of their wealth and bought the $LUNA dip. Undeniably the $LUNA printer was a mistake but this does not mean that it is game over. I am an economics student with a passion for crypto and game theory and I would like to share some of my thoughts/opinions from the last days … some of it might be garbage and please I encourage to point that out … and hopefully some of it will be valuable:
- Come up with a solution to reinstate the peg ASAP … ideally BEFORE the end of the month.
- Find a way for the community to voluntarily burn superfluous $LUNA to restabilize the price.
- Find a solution to provide exit liquidity to the people with the highest elasticity for this money.
Having said this I want to stress that these are large decisions that should not be made overnight … in the meanwhile let the degens day trade this dead puppy and hope that some of the new money will come back into the ecosystem is our best bet … from what I see on etherscan billions of $wLUNA are being burned per hour … this is good. etherscan $wLuna burn
The more good and well-formulated opinions we can gather … the easier it will be to come to a consensus. In the most immediate future we should let this run its course while we gather as many troops/information/ideas/talent/innovation as possible … NOW is the time. Keep trying to burn $LUNA in every way possible, and leave the market forces play.
some of my opinions on the above actions:
If you have sold either your $UST or $LUNA I feel for you because you likely were left with no choice, that being said, this is a sign of distrust in the algorithm, the project, and the community at whole. Furthermore … many of the people that were “quick” enough to liquidate their $UST and $LUNA - be it at a profit or a loss - may have found other ways to recoup their gains … i.e. all the degens day-trading the rallies that the algorithm inevitably causes.
From my (inexperienced) observations: $UST is the leader at the moment. Fluctuations/rallies of $LUNA are due to the bullish trend of $UST, and when that is broken, $LUNA breaks-out bearish.
this is great … more volume on exchanges means more burning … and the lower $UST goes the easier it is to resuscitate. I believe the most important thing ATM is to give investors the confidence that the algorithm along with the reserves can hold a certain trendline … like the one proposed in figure 1 for example. Downfall of this is revealing our strategy would give attacks an edge from a game theoretical perspective … but ig “size is not size” anyways right (?) → how are we going to discuss ab the reserves btw?
true: supporting $UST would give an advantage to those speculating on $LUNA
but: I believe most the people that are still buying $LUNA (or $UST for that matter) are the diamond fisted HODLers that should be rewarded the most.
The reason why I think this issue needs to be resolved before the end of the month is I assume a lot of people that had significant amounts of money in $UST were doing so as savings … i.e. they don’t need it immediately but they would like to know that they can pay their rent with it next month if they needed to. This is the kind of confidence that our investors need … not that they will go to the moon with their $LUNA and sell at the first chance they get … but rather that their dollars are still safe with “us”.
Heard a lot of ideas for this and the community is doing good work on this topic. Not sure if introducing a new coin is the right way to go about it … or whether NFT’s are the move … or whether a lockup period is sufficient … but there needs to be a better way for the people who are buying $LUNA at dip STILL to support the pegging mechanism by burning or removing $LUNA from circulation.
An interesting idea I am not sure whether I read it here or if it is novel but what if you had to stake 1 $LUNA for 1y for every $UST that you earn/redeem from Anchor … if you have 1000 on Anchor that would mean with this solution that just by paying 1000 * 0.0003 (current price) you could redeem your $UST. Maybe giving some of $BTC reserves to allow for some exit liquidity in this manner might help. Bunch of $LUNA and $UST would go back into the system and would continue flushing out paper.
Is it possible to create - on the fly - a POS mechanism whereby an auction for a token is held every hour and the winner of the auction validates the burning transaction of $LUNA.
if so we could create a game like this:
- every hour there is an auction for the burning of $LUNA transaction fees over the hour
- validator that stakes the most $LUNA during the auction period (1h) burns the $LUNA and (perhaps) receives an $AUCTION token
In other words … whoever offers the most $LUNA at a given hour burns the $LUNA fees of that hour and is rewarded with an $AUCTION token while their $LUNA offered on auction gets staked reducing circulating supply.
From a game theoretical perspective I think this is interesting … from a technical perspective I don’t know how this would work … study Econ not CompSci … please share thoughts
Possible flaw (again) would be (I presume) vulnerability to governance attack. However I believe $AUCTION should not have voting rights but rather bragging rights
an extension to my former point would be that some liquidity can be added to the $AUCTION pool to provide POS validators some liquidity either to exit or to continue PAMPing $LUNA.
If you have read this far I appreciate your time and I hope that this thread may be a productive one where we can discuss contemporary topics rationally and in a civil manner.
None of what I said is the opinion of an expert but rather some of the thoughts that have been circulating/gathering in my head … feel free to pick them apart so we can optimize them together.
At the end of the day a decentralized economy does need decentralized money , and right now we have to trust in decentralization to get out of this the best way possible.