Terra Classic Community’s Plan to Burn 800 Million USTC Tokens Hits a Snag
The Terra Classic community had passed a proposal to burn 800 million USTC tokens in an effort to restore the token’s value and peg it back to the US dollar. However, the plan encountered a problem when validators raised concerns about code changes.
Validators Question Legalities Around Code Updates
Risk Harbor, the entity managing the community treasury and the multi-sig wallet holding the USTC tokens, revealed that they no longer had access to the keys. This made the tokens inaccessible for burning. Validators are required to update their node codes for the burn, but there are legal uncertainties surrounding this action.
Validators Voting No on Burn Proposal
Due to the legal issues, validators have started voting against carrying out the burn, causing a delay in reducing the token supply by approximately 8%. This setback prompted a Terra Classic validator named Lunanauts to propose an alternative solution that avoids code updates and potential legal problems.
Hot Take: Terra Classic Faces Challenges in Token Recovery Efforts
The Terra Classic community’s plan to burn 800 million USTC tokens as part of its recovery strategy has hit a major obstacle. Validators’ concerns about code updates and legal implications have stalled the burn proposal. This delay hampers efforts to reduce the token supply and restore its value. However, a validator has suggested an alternative approach that could bypass these challenges. The outcome of this situation will determine whether Terra Classic can successfully recover and re-peg its token to the US dollar.
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