More than a year has passed since the collapse in 2022, and LUNC and USTC are still trading on exchanges. Terra, which collapsed due to the failed economic design of Do Kwon and his team, triggering a chain of bankruptcies in the cryptocurrency markets, is now back on the agenda. So, what was the purpose of the recent vote?
The Terra Classic community, previously known as UST and responsible for triggering the collapse of the Terra ecosystem, has taken action for the stablecoin. The stablecoin named UST was backed by LUNA, and as the price of the popular altcoin plummeted, more LUNA was minted as collateral, resulting in its value dropping to zero. This event, which triggered anger against algorithmic stablecoins, wiped out billions of dollars from the crypto ecosystem.
UST tokens were abandoned by Do Kwon when they went to zero as trillions of LUNA were minted in May 2022. Do Kwon, who forked the network and is currently in prison, left the collapsed ecosystem to its fate. However, the victims are trying to keep this wreckage alive under the names LUNC and USTC.
The Terra Classic community has proposed to stop the minting of USTC in order to revive the stablecoin that disappeared during the collapse. However, with burning, the aim is to bring USTC back to $1. The proposal, which was considered difficult or even impossible to achieve, was accepted with 59% of the votes in favor.
According to LUNC Metrics, the community has managed to burn only 75 billion tokens so far, which accounts for approximately 1% of the circulating 6 trillion tokens.
The details of the proposal released by the team are as follows;
“This proposal will stop the minting of USTC without the approval of the Terra Classic community. This proposal also stops gaps such as converting xUST into USTC minting. We are paying the Algo Quant team to stabilize USTC to USD, and the Terra Classic community participates in the burning of USTC, which facilitates the re-pegging. This proposal helps to carry out the repeg while protecting the community and external investors who burn USTC, knowing that institutions like Binance have stopped minting operations.”