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In a notable development, the Terra Classic community has decided to cease the minting and reminting of Terra Classic USD (USTC) tokens, representing a crucial moment more than a year following the disastrous collapse that reverberated throughout the cryptocurrency markets.
The week-long voting process, which concluded on September 21, revealed that approximately 59% of the community supported the cessation of all minting activities, while around 40% opposed the proposal. A minor fraction, just under 7%, chose to abstain from voting entirely.
The community articulated that the main aim of this proposal is to “protect the community and external investors who are burning USTC” in an effort to achieve a re-peg. They contended that any form of minting would contradict the collective endeavors of the community.
The significant collapse of the Terra UST stablecoin last May, along with the depegging of the LUNA governance token, incited panic selling and caused Terra’s value to drop to roughly $0.13. Once a leading stablecoin by market capitalization, Terra witnessed a decline in its fortunes, and LUNA’s value fell to merely a fraction of a penny.
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From the remnants of this crisis, the Terra Classic community emerged as a separate network that enabled the staking of LUNA on its blockchain. Notably, despite the upheaval in the original network, LUNA still holds an estimated market capitalization exceeding $361 million, according to CoinGecko.
In January, the Terra Classic project received a significant enhancement when Binance pledged to support an upgrade to the network that would eliminate the re-minting of burnt Terra Luna Classic (LUNC) tokens. This upgrade received substantial backing, with around 66% of the network’s voters in favor, and an overwhelming 96% supporting the change.
In the recent proposal, the Terra Classic community highlighted that this action “opens the door for institutions like Binance to start burning USTC,” given the assurance that all minting and re-minting activities are being concluded.
“Burning” refers to the permanent removal of a cryptocurrency token from circulation by sending it to an irretrievable wallet, known as a burn address.
Data from Coingecko indicates that Binance represents approximately 26% of all LUNC trading volume, with an estimated 5.8 trillion LUNC tokens still in circulation. With the decision to halt minting and reminting, the Terra Classic community seeks to initiate a new phase of stability and trust within its ecosystem.
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