First of all, before solving the problem, we must first find out what the root cause of this crisis is, in order to effectively solve the problem.
- The death spiral is the source of the crisis.
- Market problems need to be solved by the market.
- UST is no longer linked to BTC or LUNA. Should be pegged to more stable assets such as other stablecoins or USD, USD treasuries.
- Establish UST flexible savings mechanism. Set a flexible interest rate, when 1UST is less than 1 USD, you can get UST+LUNA double high reward savings with an annualized interest rate of 100% or higher; when 1UST is equal to 1 USD, the annualized savings interest rate is the market rate, such as 6% .
- When 1UST=0.1 USD, use the reserve funds to acquire UST in large quantities. No additional USTs will be issued.
- Restore the Terra ecology, gradually destroy the additional luna, and promise to control the total luna circulation at one billion.
- Guide over-the-counter funds to purchase UST to return its value.
- Guide the market to build confidence, establish transparent information release, and maintain communication with investors.