Dark Clouds Surrounding Terra Classic UST Tokens
The Terra Classic community has taken a significant step to address the de-pegging crisis of UST tokens. A proposal was made to discontinue the UST-LUNA swapping mechanism, which proved to be problematic during times of crisis. This move comes after a similar crisis in May 2022 when USTC debugged from the U.S. dollar, causing a collapse in Terra and Luna Classic.
Minting or Reminting: The Solution?
To salvage the ecosystem, the community voted to halt all minting and reminting of USTC. This proposal received 59% support. The unstable coin’s collapse last year led to a drop in value while LUNC’s supply surged significantly.
Pricing Takes a Back Seat
The objective of the proposal is to burn LUNC tokens, potentially increasing their value and restoring the value of USTC. However, achieving this outcome is challenging. After approval, USTC saw a 3.9% increase in price, reflecting a positive trend over 30 days. LUNC also experienced gains.
What’s Next for Terra Classic?
Voting proposals demonstrate the community’s determination in a crisis. USTC is currently trading far below its intended value, and it remains to be seen if these new proposals will bring stability and vitality to Terra Classic.
The SEC’s decision to depose former Terra CEO Do Kwon has created panic in the community as it may impact users who lost money in the Terra collapse. There are concerns about potential links with Binance as they are also under investigation for past trading activities.
Hot Take: Uncertain Times for Terra Classic
The Terra Classic community has taken steps to address the de-pegging crisis of UST tokens. The proposal to discontinue the UST-LUNA swapping mechanism aims to salvage the struggling ecosystem. After a similar crisis in May 2022, the collapse of USTC caused a significant loss in market capitalization. The community voted to halt minting and reminting of USTC, with hopes of increasing the value of LUNC and restoring USTC’s value. However, achieving this outcome is challenging. The future remains uncertain for Terra Classic as it strives to regain stability and vitality.
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