- A prominent LUNC chain validator has put forward two proposals to burn LUNC and USTC.
- The original token issuer, TerraForm Labs, has been ordered by the SEC to seize the business.
- LUNC validators will closely examine the affiliate protocol wallets to find the lump sum.
TerraForm Labs has agreed to wind down its operations as soon as possible in order to qualify for Chapter 11 bankruptcy protection in the United States. Terra Luna Classic (LUNC) is at a critical juncture as investors who suffered losses from Terra Luna’s system crash in May 2022 are filling their cryptocurrency claims.
The biggest fire in Terra Luna Classic history?
According to bankruptcy court filings, TerraForm Labs must wind down its business and liquidate all originally issued assets by the end of October 2024. After that date, TerraForm Labs will no longer have access to digital funds on Columbus-5 or Phoenix-1-based chains.
“The judgment requires Defendant to burn or destroy the private keys to any wallets or blockchain assets that hold UST, MIR, LUNA, Wrapped LUNA, and LUNA 2.0 owned by TerraForm.” This is the conclusion statement from the U.S. Securities and Exchange Commission (SEC).
Recently, TerraForm Labs had to reopen the shuttle bridge that was closed during the dark days of Terra Luna’s UST depeg in May 2022. The temporary resumption of this DeFi protocol allowed users to redeem their wrapped assets in LUNC as per the court’s direction.
According to on-chain data from Terra Finder, the community has successfully recovered 2.58 billion LUNC tokens from the Shuttle Bridge so far.
Find out how much LUNC you can consume
As the $4.5 billion settlement in the TerraForm Labs lawsuit forces the Web3 company to foreclose its business, assets in protocols like Anchor and Mirror are about to be burned. According to popular YouTuber and LUNC validator HappyCatKripto, there are four known wallets connected to the Mirror protocol, which holds over 500 million tokens.
Together with the funds of the Anchor protocol, the Terra Classic tokens waiting for the burner are now a whopping 275 billion coins, or about $22 million. This could potentially open the door to the largest LUNC burn ever, burning 25.5 trillion Terra Luna Classic tokens in one go.
“G“If we get an early burn, it’ll really give us the momentum we need.” HappyCatKripto has leaked. Naturally, a burn of this scale will work in favor of further collaboration with Binance and other exchanges committed to chain recovery efforts.
To achieve this, the validator has urged the community to migrate the Mirror and Anchor protocol contracts to a new code using a governance model similar to Risk Harbor. Both governance proposals are open for voting and discussion, but the timeline for this epic burn has not yet been determined.
On the other side
- Another asset in question is Terra Classic USD (USTC), renamed from UST after a system crash in 2022 caused a significant unpegging of the algorithmic stablecoin.
- Looking at the Mirror protocol, there are 177 million USTC tokens that need to be burned, and across all TFL protocols combined, there are approximately 1 billion USTC that can be removed from circulation.
Why this matters
Efficiently removing the over-printed supply will help maintain the long-term stability of the cryptocurrency.
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