- TerraForm Labs proposed burning 45 million of Terra’s malfunctioning stablecoins.
- USTC rose 10.7% as a significant burn proposal was approved.
- The Terra Luna Classic will suffer additional burns due to TFL’s bankruptcy.
The Terra Luna Classic (LUNC) blockchain is seeing a breakthrough in the community’s efforts to combat overprinted supply. In the latest installment of the LUNC burn, proposal #12138 covers 46,556,271 Terra Classic USD (USTC) tokens on the Mirror Protocol.
Why USTC Burns is at the heart of Repeg Quest
If this USTC burn proposal passes the threshold, Terra Luna Classic will see 46 million USTC tokens burned through contract migration. This is relevant to the bankruptcy of TerraForm Lab, as the court ordered the original issuer of the LUNC and USTC tokens to remove all remaining digital assets before ceasing operations.
TerraForm Labs must execute this burn by October 30, 2024 in exchange for bankruptcy protection. At one of our recent X Spaces, TerraForm’s current CEO, Chris Amani, explained to the LUNC community that Terra’s executives had to choose between burning their tokens or destroying their privacy. key.
Terra, which decided to burn, recently temporarily opened the Shuttle Bridge, which had been inactive since the collapse of the Terra ecosystem in May 2022. The court’s order allowed blockchain users to redeem assets wrapped in Terra Luna Classic Layer-1.
TerraForm Labs gave the community a 30-day period to withdraw assets from the cross-chain bridge and assured that all remaining assets would be burned once the deadline began.
USTC, LUNC Syrocket offer subsidy of 10%
As voting has just ended, Terra Luna Classic’s stakers and validators have successfully approved the USTC burn proposal. Following today’s development, the malfunctioning stablecoin immediately posted a 10.7% rally.
USTC has strengthened to $0.025, its best performance in three months, but the price is still far from the original USTC $1 peg level.
Meanwhile, LUNC is showing a slight daily gain of 2.5% and is currently approaching $0.0001. Last Thursday LUNC briefly picked this level and traded at $0.0001052, but it was rejected the next day and returned to 4-0 territory.
This was mainly due to Terra Luna Classic’s trading volume not increasing by 10% over 7 days in both spot and derivative markets. Due to the thin depth of the cryptocurrency market, additional problems may arise for the LUNC price if market sentiment suddenly turns bearish.
The LUNC community is trying to solve this problem through the Tax2Gas mechanism, which triples the mandatory burn of LUNC on each transaction from 0.5% to 1.5%. This is a big step towards revitalizing Terra Luna Classic, but most of the community agrees that demand is as important as decreasing supply.
On the flipside
- In addition to the TerraForm Labs Chapter 11 bankruptcy-related burn of Terra Classic, the community is also awaiting Binance’s monthly LUNC burn.
- Leading exchanges by trading volume burn Terra Luna Classic at the beginning of each month, derived from accumulated fees on relevant pairs.
Why This Matters
Burning large amounts of overissued supply can drastically improve the supply dynamics of a coin, potentially making the altcoin more attractive to current and new investors.
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