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Alex / Ed / Max Proposal: “#USTN” Final version summary
Our final proposal, after a couple rounds of major changes from its original white paper, is outlined below.
150bn LUNC burned immediately, 50bn LUNC re-minted to re-stock Oracle Rewards Contract (net burn 100B)
35bn (est) LUNC can be split between additional burning, additional BTC for the Reserve, developer compensation/funding, or other basic, badly-needed ecosystem support
Oracle rewards pool decreased from ~295B to ~50B
Oracle rewards pool replenishment begins (it’s currently draining to zero with no replenishment because the swap mechanism is broken), which will generate sustainable LT income for validators vs unsustainable status quo
135m USTN (est) enters circulation, backed by USD $83M (est) of BTC and new capital controls
Launch an algorithmic fungible token successor to UST, which I have called USTN, to make a complete legal break from any debt obligations or securities assignment that courts may assign to USTC based on prior mistaken marketing of UST in the past
Enable the USTN-LUNC 2-way swap with very tight initial capital controls which loosen over time, causing any immediate USTN sellers to be heavily taxed by the protocol on their way out
Remove all the LUNC in the Oracle Rewards Distributor smart contract and exchange it for ~$83M of terraBTC
Airdrop ~$135M USTN (83M / .6), backed by the $80M of tBTC, to LUNC holders only, directly proportional to how much LUNC you own.   
As the $135M USTN is minted in a re-enabled swap, the reactivated swap would burn around $55M USD (185B LUNC). The Oracle Rewards Distributor would start to be refilled as the new USTN enters usage.
Instead of burning 185B LUNC immediately, burn 100bn-135bn, and put the remainder (I’m suggesting 50bn LUNC here, but like any other parameter this split is up to governance) into the Oracle Rewards Distributor so that stakers and validators can still get nicely rewarded for doing the necessary work to keep the chain running.
The USTN’s BTC collateral will be managed by a tranche-based Decentralized Reserve system, as outlined in section 5 of our original white paper. We will discuss its details in a separate white paper.
If you’re a LUNC holder: there will be some sell pressure as the protocol slowly sells the [240bn] LUNC for BTC. Around half of this will be reversed when the protocol’s minting of the first 130M-ish USTN into circulation (which will be airdropped to LUNC holders) burns LUNC supply. Total LUNC supply will drop by 100bn.
If you’re a LUNC staker or validator: Your staking yields will drop from their very elevated levels to something lower; however, the rewards will be sustained by a functioning, re-enabled swap.
If you’re a USTC holder: Nothing.
 I, probably in conjunction with Ed and whomever else wants to join, will advocate a separate proposal at a later date to help USTC holders who want to stay within the system. However, this issue is far more contentious than the issue of how to structure the best AFT for the Protocol and we made a big mistake trying to solve both issues at the same time.
 The Protocol should discuss the implementation of this: CEXs always have severe problems with airdrops and we will need to make an assessment if CEXs are equipped to properly airdrop to their on-CEX holders. They probably won’t, so we should cooperate with the CEXs to encourage users to temporarily or permanently migrate their assets to the chain to be airdrop-eligible.
 Large CEXs are key long-term partners of our protocol and shouldn’t be threatened under any circumstances, this needs to be as constructive as possible