The Terra Classic Community Votes to Halt Minting and Reminting of UST Tokens
The Terra Classic community has made a decision to cease the minting and reminting of Terra Classic UST (USTC) tokens in an effort to revive the value of the failed stablecoin. This proposal received 59% support from the community.
Background: The Collapse of the Terra Ecosystem
USTC is the stablecoin that was at the center of the collapse of the Terra ecosystem, which caused a $40 billion loss in the crypto market last year. During this time, USTC’s value plummeted, while Luna Classic (LUNC) supply skyrocketed to over 6 trillion.
“This proposal also stops loopholes such as converting xUST to mint USTC. We pay the Algo Quant team to re-peg USTC to USD, and the Terra Classic community is participating in the burning of the USTC supply,” the proposal states.
The community hopes that by implementing this proposal, they can accelerate the burning of LUNC tokens and ultimately increase their value. This would subsequently restore the value of USTC, although this outcome is unlikely. Currently, only 74.91 billion LUNC tokens have been burned, leaving a circulating supply of 5.82 trillion and a total supply of 6.84 trillion.
Impact: Price Increase for USTC and LUNC
Following the approval of this proposal, there was a 3.9% increase in the price of USTC, bringing it to $0.0129. Additionally, LUNC experienced a 2% gain and its value has risen by 8.3% within the past seven days.
SEC’s Motion to Depose Do Kwon
In the meantime, the United States Securities and Exchange Commission (SEC) has filed a motion to depose Do Kwon, the former CEO of Terraform Labs and the mastermind behind Terra UST. Do Kwon is currently serving a prison sentence in Montenegro for passport fraud, but his future remains uncertain as both the US and South Korea are seeking to extradite him. If extradited, he may face decades behind bars in both countries. In light of these circumstances, the SEC is seeking to prevent the defendants from using a declaration from Kwon during summary judgment.
Hot Take: The Struggle to Revive USTC
The Terra Classic community’s decision to halt the minting and reminting of USTC tokens reflects their determination to revive the failed stablecoin. However, with only a fraction of LUNC tokens burned so far, it remains uncertain whether this action will be enough to restore USTC’s value. Meanwhile, Do Kwon’s legal battles with the SEC further complicate the situation surrounding Terra UST. The future of USTC and its ecosystem hangs in the balance as stakeholders navigate these challenges.
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