1. Background and Core Reference Logic
As the core stablecoin of the Terra ecosystem, the normalization of USTC issuance is crucial to ecological health and community interests. Drawing on the issuance logic of the US dollar—which achieves reasonable expansion through 2% moderate inflation combined with economic GDP growth—USTC can adopt a similar approach. Under the premise of adhering to the core vision of “re-anchoring to $1”, moderate issuance is recommended to optimize the current issuance mechanism and alleviate community concerns about “unrestrained issuance without rules”, which would dilute holders’ equity and undermine value anchoring.
The MM2.0 mechanism has already realized effective burning of LUNC and USTC, providing core support for the orderly issuance of USTC. Combined with the supplement of the staking mechanism, this proposal is hereby submitted.
2. Core Objectives of the Proposal
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Adhere to USTC’s vision of re-anchoring to $1 and establish an ordered and controllable inflation mechanism by referencing dollar issuance logic.
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Launch USTC staking, with the reward source linked to the issuance quota converted from MM2.0-burned LUNC or USTC, realizing the integration of issuance and burning.
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Eliminate community fears of unrestrained issuance and balance ecological circulation, holders’ equity, and long-term ecological development.
3. Specific Content of the Proposal
The core of this proposal is the linkage of the “inflation mechanism + staking mechanism”, supported by MM2.0-burned assets, to ensure orderly issuance and feasible staking.
3.1 Ordered and Controllable Inflation Mechanism (Based on MM2.0 Burning)
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LUNC burned via MM2.0: Converted at the average price provided by the oracle during the corresponding burning period, all included in the USTC issuable quota pool. Issuance is strictly limited within this quota.
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Directly burned USTC: The burned amount added to the issuable balance pool, which, together with the LUNC-converted quota pool, forms the total issuable quota.
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Constraints:
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Quota conversion must be based on the average price provided by the oracle during each specific period;
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Quota calculation conducted by a community-designated third party;
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Real-time public disclosure of quotas;
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Issuance shall not exceed the total limit;
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Rule adjustments subject to community vote.
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3.2 USTC Staking Mechanism (Signal Proposal Only, No On-Chain Parameter Changes)
This proposal is currently a signal proposal and does not change any on-chain existing parameters. Its core role is to guide the subsequent development of USTC staking business. The official launch and specific rules of staking will be promoted separately after development is completed, based on the guidance of this proposal.
The reward source for staking is clearly defined as—USTC issuable quota converted from MM2.0-burned LUNC or USTC at their corresponding value (based on oracle average prices). Issued in an orderly manner, no additional unsupported issuance quota is added to ensure compliance and controllability of subsequent staking rewards.
4. Advantages and Feasibility Analysis
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Referential Logic: Drawing on the mature dollar issuance model, the mechanism is scientific and easy for the community to understand combined with USTC’s positioning.
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Risk Controllability: Issuance is deeply bound to MM2.0 burning and oracle-averaged prices, and staking rewards avoid excessive issuance, fundamentally alleviating community anxiety.
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High Operability: Relying on the existing MM2.0 mechanism and standard oracle data feeds, there is no need to build a new framework; staking rules are simple with low implementation costs.
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Win-Win for All Parties: It balances the re-anchoring vision, ecological circulation, and holders’ equity, while enhancing USTC’s holding willingness and ecological stickiness through staking.
Important Note: This proposal does not change the existing deflation method of LUNC burning. It only conducts quota conversion and issuance guidance based on the burned assets from MM2.0, without adjusting LUNC burning rules. Meanwhile, there is no need to worry about changes in Binance’s existing burning policy—the promotion of this proposal is independent of Binance’s burning mechanism and does not affect its implementation.
5. Conclusion
The current USTC issuance mechanism urgently needs optimization. Referencing the dollar’s logic of “moderate inflation + GDP growth”, launching staking and realizing orderly issuance through linking with MM2.0 burning and oracle-averaged prices, under the premise of adhering to the re-anchoring vision, complies with market laws and protects community rights and interests.
It is recommended that the community vote to adopt this proposal, promote the simultaneous implementation of inflation and staking mechanisms, and set up a special working group to be responsible for quota calculation, public disclosure, and supervision to ensure the effectiveness of the proposal.