Safely reactivating the market module entails making the following adjustments:
• Implement Oracle Price Feed for USTC:
- Integrate an oracle module that provides real-time price feeds for USTC, similar to the existing oracle system for LUNC. This ensures accurate and current pricing for all transactions involving USTC.
• Burn 80% of the Fee, allocate 10% for Oracle Pool, and designate the remaining 10% to a pool for buyback programs to reinforce the peg.this could be a parameter change option.
• Enforce limits on the size of virtual liquidity pools, introducing multiple pools with conditional activation steps.
•Furthermore, impose a hard cap on the max supply of LUNC and USTC (with enhancements proposed by Igor Veras).
•Add a kill switch.
Motivation:
Reviving the market module offers both prospects and risks:
Rewards:
• Potential restoration of USTC stability to $1, revitalizing the chain’s utility.
• Revenue generation through fees from LUNC<>USTC swaps (helps mitigate OP depletion), distributed as Oracle rewards to validators, delegators, and for buyback programs.
Risks:
• Unwanted LUNC minting (addressed through the adoption of a multi-conditional pool system and reduction of hard caps for both coins).
1) Creating a system that will utilize real-time price feeds for USTC instead of relying on SDR pools will not be an easy task, but once completed, it will enhance the functionality of the oracle price feed. With real-time price feeds for USTC, swaps will be more accurate, and by limiting the size of the virtual liquidity pool, the risk of things going wrong is virtually zero.
2) Limiting the virtual liquidity pool size and implementing multi-conditional pools:
To mitigate the risk even further , we can cap the size of the virtual liquidity pool. Presently, the base pool size is set at 100M SDR with an 18-block recovery period (~1 minute). To lessen liquidity risk, I suggest reducing the base pool size to around 1000 USTC and extending the recovery period to 14,400 blocks (~24 hours).
However, to entice larger investors, the proposed base pool size may not suffice. Thus, I recommend implementing a multi-conditional pool system. This system entails setting conditions for the opening of subsequent pools. For example, when the first pool reaches capacity (1000 ustc), instead of closing the market module for 24 hours, a new, larger pool (2000 ustc) will open if the USTC price doesn’t deviate more than 5%.
This procedure can be iterated several times, gradually increasing pool sizes (e.g., 1000, 2000, 4000, and so forth) until reaching a specified limit. Resetting pool sizes on a daily basis would fortify the system against potential threats.
Please note that the suggested values for base pool size, number of pools, and recovery period are open to adjustment. A testnet for multi-conditional pools will be established to refine and calibrate these values before a final proposal is made.
To further mitigate risks, I suggest imposing hard caps on the maximum supply of LUNC and USTC. These caps can be adjusted through incremental burns and re-pegging in the future.
Implementation:
labors required include, but not limited to:
• Establishing the testnet to evaluate optimal values for base pool size, number of pools, and recovery rate, upgrade testnet for the effect (enabling swaps , smart contracts, liquidity pools etc).
• Developing a mechanism to burn a portion of the fee and a the creation of a module for buyback programs.
• Creating a system for multi-conditional virtual pools within the market module.
• Proposing a signaling initiative on Station to assess community support (spooked with GL they will look in to this if a proposal is passed) .
A YES vote signals community backing for these endeavors, while a NO vote indicates otherwise. Queries, ideas, and feedback are welcomed.
https://cryptonews.com/news/terra-luna-foundation-guard-freezes-100m-compensation-treasury.htm
https://commonwealth.im/terra-classic/discussion/12924-reopening-of-the-market-swap
Some notes :
To further promote the attempt to peg USTC, it is recommended to introduce a staking system for USTC on the Terra Classic chain. This would require the development of a new module. The main concept behind this initiative is to remove more coins from circulation.
However, to implement this, USTC would need to be provided as rewards for staking. In this case, the 1.8 billion USTC currently held by LFG reserves could be utilized. These funds were initially earmarked to support the USTC/LUNC community and have been held for two years without any action. It appears that LFG reserves will not take any action unless a governance proposal is passed by the community.
I suggest transferring these funds to the community pool ( freeze them first )to remove them from the circulating supply. Later, the community can decide how to utilize these funds, whether for the creation of an Oracle Pool for USTC, burning them, or any other purpose deemed appropriate by the community.
These are all controversial ideas, but we are not a normal blockchain; we have a history, a history that we have to solve.
This idea haves different topics, and it makes sense to separate in more than one governance proposal. Any feedback will be welcome.
This could be our best effort to bring glory to the entire ecosystem of Terra Classic.
Thanks, Vegas.
https://finder.terraclassic.community/mainnet/address/terra1gr0xesnseevzt3h4nxr64sh5gk4dwrwgszx3nw
