LUNC Forex Genesis + EUTC Repeg

[NicolasBoulay]

LUNC FOREX – Collateralized Stablecoin Module (CSM) EUTC Kickoff

Revised Proposal with Stablecoin-Based Fees + Automatic LUNC Buyback System

All development done for free; only liquidity investment required post development and will require new proposal

1. Overview

The LUNC FOREX module introduces a multi-currency, fully collateralized stablecoin system built directly on Terra Classic.

Key improvements in this version:

• Mint & redeem fees are now paid in the same stablecoin used
  → simpler for users
  → avoids friction

• These fees become secondary collateral

• Secondary collateral is used to buy back LUNC on GDEX Terraswap or Terraport whichever gives best price at the time of buy back

• Purchased LUNC is stored in a permanent protocol vault
  → This creates a continuous buyback pressure
  → Strengthens the LUNC supply over time

No matter how much EUTC is circulating, only 10% of total supply can be redeemed per day.

This prevents:

• Instant mint → redeem arbitrage loops

• Large-scale redemption runs

• A liquidity crunch in the USDC vault

• Oracle-timing exploits

Because even if someone mints 10M EUTC, they can’t redeem more than 1M/day, no matter what.

This drastically reduces the collateral risk, meaning:

0.5% premium is now more than enough

100.5% collateralization becomes safe & stable

The system becomes resistant to volatility and flash pressure

This design replaces the failed algorithmic market module with a safer, collateral-backed architecture driven by user demand and DEX arbitrage.

2. Supported Fiat Stablecoins

EUTC – Euro-pegged Terra Classic Stablecoin

Collateral Options:

• EURC 1:1

• USDC 1:1 with 0.5% premium

USDC includes a premium to protect against EUR/USD fluctuations and DEX spread.

3. Minting Process

Minting with EURC (no premium):

1. User deposits EURC.

2. Contract mints EUTC 1:1.

3. Protocol fee: 1.5% taken in EURC
   → No need to buy USTC or extra tokens.

4. The EURC fees become secondary collateral.

Minting with USDC (+0.5% premium):

1. User deposits USDC.

2. Contract applies 0.5% mint premium.

3. User receives:
   \text{EUTC minted} = \text{USDC deposited} \times 0.995

4. Protocol fee: 1.5% taken in USDC

5. The USDC fees become secondary collateral.

4. Redemption Process

1. User sends EUTC back to the contract.

2. EUTC is burned.

3. User receives the same collateral they deposited (EURC or USDC).

4. Protocol fee: 1.5% taken in the same stablecoin they withdraw.

This keeps the system clean and avoids token-hopping.

5. New Mechanism: Secondary Collateral Buyback

All mint & redeem fees (in EURC or USDC) accumulate in the Forex Secondary Reserve.

The contract then performs:

Automatic LUNC Buybacks

• Secondary collateral is periodically swapped on GDEX Terraswap or Terraport whichever gives the best price at the time of buy back for LUNC.

• Purchases happen automatically through smart contract logic.

• No governance needed, no human involvement.

Permanent Vaulting

All buyback LUNC is sent to a LUNC Vault:

• LUNC is non-circulating

• Cannot be spent

• Only grows over time

• Strengthens long-term LUNC scarcity

This essentially turns the stablecoin into a permanent LUNC accumulation engine.

6. Liquidity Strategy

The community pool may seed initial liquidity for:

• EUTC/LUNC

• EUTC/USTC

• EUTC/USDC

DEX environments:

• Garuda (GDEX): 0.3% swap fee (0.2% to LPs 0.1 dex shares)

• Terraswap: 0.3% total swap fee (100% to LPs)

• Terraport 0.3% swap fees

Plus the chain earns the 0.5% tax on every native swap.

This creates:

• Arbitrage opportunities

• Peg maintenance through DEX

• Increased chain volume

7. How This Design Benefits the Chain

Fully Collateralized & Regulatory Neutral

No algorithmic expansion. All stablecoins backed 1:1 by EURC/USDC.

Stablecoin fees power LUNC accumulation

Every mint & redeem → protocol earns stablecoin → buys LUNC → vaults it forever.

Sustainable revenue without inflation

Chain revenues come from:

• onchain tax 0.5%

• Liquidity providers fees on DEX 0.2-0.3%/trade

• Protocol fees 1.5% on mint/redeem that buys back and vaults LUNC

Simple UX

Users only need the stablecoin they want to mint with.

No need to buy an extra fee token.

8. Funding Request

At the end of the proposal:

• Request for liquidity injection into the primary pools

• All coding, architecture, smart contracts, testing, and documentation remain free

• Funds only go toward strengthening peg liquidity

9. Final Clarification

This proposal is exclusively for the construction of the CSM system:

• Multi-asset collateral

• Stablecoin issuance

• Automated swaps

• LUNC buyback vault logic

It is the replacement of the old market module and establishes a safe, transparent, decentralized stablecoin framework.

Appendix:

Kill switch :

• Be multisig-controlled

• Require multiple signers (5-of-9 is common)

• Pause new redemptions temporarily

• Never block user balances or stop mints unless needed

• Automatically resume after governance vote

This protects user trust while preventing chaotic failure scenarios.

6.2 Fiat Price Oracles

Onchain oracle live fiat prices

• USD, EUR, GBP, JPY, CAD, SGD, AUD, CNY and more.

Ensures real-time (30 sec refresh), accurate conversion and mint ratios.

Vault Infrastructure

A smart vault system will:

• Lock collateral (USDC EURC, LUNC, etc.)

• Maintain over-collateralization ratios 101.5%

• Track minted outstanding supply

• Automatically rebalance mint caps based on collateral depth and volatility

EUR/USD 1.0340 – 1.1850 Current range on W1 time frame.

USD interest rates should drop.

EUR interest rates should drop, slightly.

Current rates are 2.15% in European Union, 4.00% in USA

The EUR/USD can fluctuate up and down 1% per day easily but many days does not move at all.

We suggest portfolio rebalancing there is a 5% differential between the value of the USDC and EURC

Presented by

Nicolas Boulay , Lunc Cookie DO , Luncverse Validator, Luncdash team.

Strathcole has been tremendous help with organizing everything and will help deploy CSM after approval of proposal.

Mark Mcdonnell Forex expert guiding us on liquidity rebalancing, macroeconomic trends and risk assessment.

[Rocko]

Repurchase the Lunc and stop with the permanent vaults. The repurchased Lunc must go to the burn wallet to avoid speculation and prevent us from thinking you’re going to scam us at any moment. You have to do things right. It’s very simple. Don’t try to fool us again. We are investors in the Terra Classic chain, and we want the Lunc repurchases to go to the burn wallet, not a permanent vault. If they go to a permanent vault, it’s a no for investors; if they go to the burn wallet, it’s a yes. Stop with the useless nonsense that leads us to think it’s just another scam and do things right.

[Rocko]



"When we heard about LUNC Forex, it seemed like a great idea to attempt to re-peg all the stablecoins collaterally with fiat or with USDC, etc. It seemed like the perfect, well-executed idea that could eventually return all glory to the Terra Classic chain.

That entire magnificent idea collapses when we hear you talk about Shiba and compare it to LUNC. We are not Shiba; we are Terra Classic, and LUNC is our token. When we hear you say these things about Shiba, about its trillions, and compare it to the trillions of LUNC, and say that now that it is no longer an algorithmic currency there is no need to burn them, your entire magnificent idea of LUNC Forex falls apart for investors.

And when you say these things and then add that the repurchased LUNC must go to a permanent vault, we all start thinking about a possible scam again. We come from the biggest crypto scam, which caused a huge collapse with Do Kwon (DKWON) as the culprit, and we must clear ourselves of any possible scam before the whole world.

So, change the permanent vault for the burn wallet, and you will have a ‘yes’; if you don’t do it, it is a ‘no’ because it gives rise to a future and possible scam. All possible LUNC must be repurchased with the profits and sent to the burn wallet to finish the LUNC supply. I repeat, it has to be burned to eliminate it from the supply and thus restore the entire chain to the place it deserves. Do not compare us to Shiba; we, with the future profits of LUNC Forex, can burn the LUNC supply. Therefore, do things right and do not talk nonsense about not needing to burn the LUNC supply; eliminating the LUNC supply and the re-peg of the stablecoins is the objective of LUNC for investors from the beginning; do not try to change part of the objective."

[NicolasBoulay]

Since we have no algorithmic peg with ustc, burning does nothing else than destroy marketcap. The bought back LUNC is used to secure the Forex and rebalance collateral in case of extraordinary fluctuations. As of right now, 0.4% of every trade from these stablecoins pools will go to burn so no need to add more burns for nothing, let the organic volume take care of it

[Rocko]

Repurchase the Lunc and stop with the permanent vaults. The repurchased Lunc must go to the burn wallet to avoid speculation and prevent us from thinking you’re going to scam us at any moment. You have to do things right. It’s very simple. Don’t try to fool us again. We are investors in the Terra Classic chain, and we want the Lunc repurchases to go to the burn wallet, not a permanent vault. If they go to a permanent vault, it’s a no for investors; if they go to the burn wallet, it’s a yes. Stop with the useless nonsense that leads us to think it’s just another scam and do things right.No, it doesn’t destroy any MC. I don’t know where you got that nonsense from. On the contrary, it increases LUNC’s MC with the burns. If you don’t understand that we have to get rid of the DKWON scam that caused a 6 trillion supply, then you don’t understand anything. Ending the scam’s supply is what restores confidence to the sector. Maintaining the 6 trillion perpetuates the scam since stablecoins have to be collateralized with USDC, fiat, never with LUNC. Therefore, I’m just asking you to stop taking us investors for fools. Change the permanent vault for the burn wallet; otherwise, it’s a no, and you can go looking for L2 funding and forget about the community funding this if you don’t change the permanent vault for the burn wallet

[Rocko]

No, it doesn’t destroy any MC. I don’t know where you got that nonsense from. On the contrary, it increases LUNC’s MC with the burns. If you don’t understand that we have to get rid of the DKWON scam that caused a 6 trillion supply, then you don’t understand anything. Ending the scam’s supply is what restores confidence to the sector. Maintaining the 6 trillion perpetuates the scam since stablecoins have to be collateralized with USDC, fiat, never with LUNC. Therefore, I’m just asking you to stop taking us investors for fools. Change the permanent vault for the burn wallet; otherwise, it’s a no, and you can go looking for L2 funding and forget about the community funding this if you don’t change the permanent vault for the burn wallet

[NicolasBoulay]

The buy back increases marketcap. Not the burn. Just like community pool funds, collateral cannot be moved or rebalanced without a vote so no need to form crazy ideas in your mind that were here to scam anyone. If i were a scammer, id probably ask for money for the months and months of work ive put in to develop this concept. So im either the world most terrible scammer or a LUNC community member with years of experience, financial expertise a great team along with me

[NicolasBoulay]

Liquidity is the only way to higher onchain volume. You can market and burn all you want it wont raise volume. Collateral is KING when you are collateralizing a stablecoin it make absolutely Zero sense to burn your collateral unless you want to see a stablecoin depeg again.

[Rocko]

We’re going to back it 1:1 with fiat or with liquid assets, as the Genius Law states, collateralized with fiat. That’s why the LUNC guarantee makes no sense because you already have the guarantee. I told you not to take us for fools; we’re investors, we know very well what we’re talking about, something you don’t seem to understand at all. I ask you to reflect on this and I ask you not to tell us anything about guarantees that aren’t necessary since the Genius Law doesn’t provide for them to maintain parity between stable assets and fiat.

[Rocko]

We’re going to back it 1:1 with fiat or liquid assets, as the Genius Law states, collateralized with fiat. That’s why the LUNC guarantee makes no sense because you already have the guarantee. I told you not to take us for fools; we’re investors, we know very well what we’re talking about, something you don’t seem to understand at all. I ask you to reflect on this and not tell us anything about guarantees that aren’t necessary, since the Genius Law mandates parity between the stablecoin and fiat currency with liquid assets to prevent depeg and potential fraud.

[NicolasBoulay]

The LUNC is secondary collateral every EUTC is backed 1/1 with Euro coin or USDC with a premium.

[Jimmy84x]

Repurchase the LUNC and send it to the burn wallet, not some “permanent vault.”
The repurchased LUNC must be burned — storing it in a vault is a non-starter for any investor.
If you don’t burn it, it just looks like another scam.
We are long on the Terra Classic chain, and we expect all LUNC bought back to be permanently removed from circulation, not locked away.
Until you commit to a proper burn — not a vault — I vote no.

[NicolasBoulay]

Also id love to back with fiat, but for this, we need a business which we cannot have at the moment. Look at the friction im getting for this proposal that is literally zero risk and only upside.. imagine if id of suggested a LLC to operate bank accounts.. youve already called me a scammer twice it probably be worst if id of suggested the LLC. We are going to go to a design like this one day but we cannot move to this model until weve proven the community that our FOREX works, that EUTC is repeg and fully collateralized, and that we are generating an income for the chain. Thank you for your support , the genius law does allow stablecoins fully backed by stablecoins so no need to worry since we are over collateralized by adding 1.5% protocol fees that also act as a buy back and vault LUNC mechanism also why burning this collateral only hinders our concept.

[NicolasBoulay]

Why would you destroy collateral? It only makes the Stablecoins more risky. Burns are useless we have no peg with USTC so no need to reduce supply to try to attempt a repeg. USTC is the only coin that needs to be reduced to eventually be able to collateralize each one.

[Rocko]

Burns are necessary to increase the price and restore the glory. Lunc, repeg + supply elimination = main objective. Ask the OKX token if reducing the supply makes the price increase, please ask it, or ask Shiba that you like so much.

[NicolasBoulay]

Marketcap is calculated as such my friend

Circulating supply x price

example of 6.5T x .0006 LUNC… lets say tomorrow we eliminate 1T from supply, you now have 5.5T x .0006 because you didnt create any value you didnt raise price all you did was burn supply. Shib has 550 Trillion supply with 5.1 Billion marketcap , the supply has nothing to do with it, if anything we dont have enough.

if your price doesnt rise and you burn LUNC all you do is destroy marketcap. Its not an opinion its the way it actually works.

[Rocko]

You’re confusing market capitalization with the supply of LUNC. If half the circulating supply were burned right now, you’d immediately have 2x. I’ve been in the investing world much longer than you, so you don’t need to explain to me how the price is calculated. I can explain it to you as I just did. We don’t need secondary collateral. With the Genius Act in hand, we more than comply by collateralizing with liquid assets. The only secondary collateral for LUNC we need is that repurchases go to the burn wallet; otherwise, it’s a no. I’ve made my explanation very clear, and I think investors understand it as well as I do. I’ve said everything I needed to say, so I wish you good luck. You’re going to need it if you don’t switch from the permanent vault to the burn wallet.

[NicolasBoulay]

Then please vote no because there is no way in the world a sounds business man will burn a collateralized stablecoin’s collateral. Will not hinder the forex for your vote or to not hurt your feelings. we will make the best business decision for lunc.

[MrJohnGod]

I do not want this proposal , only I want atlest 6 trillions is burnt , I do not want anything with vaults

[Donovan]

I just read the proposal and the comments regarding it. When you talk about sensibility and making the best decision, the creation of a vault is inexplicable. That is unacceptable. If we want to carry out the forex system, it certainly cannot go through the structure proposed here. I also vote no.