In a pivotal decision, the Terra Classic community has voted to cease all minting and reminting activities related to TerraUSD Classic (USTC) with the objective of restoring a stable peg between USTC and the United States dollar. This move comes as the community and external investors seek to safeguard their interests and contribute to the goal of repegging USTC to the U.S. dollar.
The recent proposal, which saw active participation from the Terra Classic community, resulted in 59% of the voters in favor of discontinuing USTC minting, while approximately 40% opposed the change. The majority’s decision reflects a consensus that reducing the supply of USTC is a necessary step towards achieving stability.
The saga began in May 2022 when USTC depegged from the U.S. dollar, triggering a catastrophic collapse within the Terra ecosystem. Luna Classic (LUNC), closely linked to USTC, bore the brunt of this depegging, with its value plummeting by nearly 100%. This downturn in LUNC value subsequently rippled through the broader crypto markets, resulting in an estimated loss of approximately $40 billion in total market capitalization.
One of the critical aspects of the proposal is the commitment to burn existing USTC tokens. “Most importantly, this proposal opens the door for institutions like Binance to start burning USTC knowing that the minting and reminting is over,” the statement noted, signaling a potential path to recovery and restoring confidence in USTC.
The decision to halt minting activities comes on the heels of growing concerns within the Terra Classic community regarding an increase in spam following the decline in LUNC prices. To address these concerns, the community recently voted on multiple proposals, one of which was to raise the minimum deposit requirement from 1 million LUNC to 5 million LUNC. The outcome was decisive, with 93.22% in favor of increasing the minimum deposit requirement amount.
The Terra Classic community’s determination to stabilize the USTC peg underscores their commitment to the long-term viability of the Terra ecosystem and its associated tokens. As they navigate these turbulent waters, all eyes are on the path ahead, with the burning of USTC tokens seen as a crucial step toward rebuilding trust and confidence in the ecosystem.