Terra Classic Community Votes to End Minting and Reminting of USTC Tokens
The Terra Classic community has made the decision to cease the minting and reminting of Terra Classic USD (USTC) tokens. This comes more than a year after the collapse of UST stablecoin, which caused a major meltdown in the crypto markets. The community conducted a week-long voting process, with approximately 59% in favor of ending all minting activities. Around 40% voted against the proposal, while nearly 7% abstained from voting.
In their statement, the community emphasized that the proposal is aimed at protecting both the community and external investors who are burning USTC to achieve a re-peg. They believe that any form of minting would contradict their collective efforts.
The Collapse of Terra UST Stablecoin
Last year, the Terra UST stablecoin experienced a significant collapse, leading to a loss of its peg alongside the LUNA governance token. This resulted in many holders hastily exiting their positions. Following the depegging, Terra’s value plummeted to around $0.13, and LUNA’s worth decreased significantly.
Despite this collapse, the Terra Classic community emerged as a separate network that allowed for staking LUNA on its blockchain. Currently, LUNA still holds an estimated market capitalization of over $361 million.
Binance Support and Burning Tokens
In January, Binance agreed to support an upgrade to the Terra Classic network, eliminating the reminting of burnt Terra Luna Classic (LUNC) tokens. This proposal received strong support from 66% of voters, with 96% in favor of the upgrade.
The recent decision by the Terra Classic community has opened up opportunities for institutions like Binance to burn USTC tokens, as there will be no further minting or reminting. Burning involves removing a cryptocurrency token from circulation permanently.
According to CoinGecko, Binance accounts for approximately 26% of all LUNC trading volume, and there are still an estimated 5.8 trillion LUNC tokens in circulation.
Hot Take: Terra Classic Community Ends Minting and Reminting of USTC Tokens
The Terra Classic community has voted to cease the minting and reminting of USTC tokens, signaling a significant development in the aftermath of the collapse of Terra UST stablecoin. With a majority of the community in favor of this decision, efforts are being made to protect both the community and external investors who continue to burn USTC. This move also paves the way for institutions like Binance to participate in burning USTC tokens. As the Terra Classic network moves forward without any further minting activities, it will be interesting to see how this decision impacts the overall stability and growth of the ecosystem.
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