- TerraForm Labs offered a 45M burn of Terra’s malfunctioning stablecoin.
- USTC whipped up 10.7% gains as the crucial burn proposal was approved.
- Terra Luna Classic will see further burns per TFL’s bankruptcy.
The Terra Luna Classic (LUNC) blockchain is seeing a breakthrough in the community’s efforts to combat its overprinted supply. In the latest installment of LUNC burns, proposal #12138 touches upon the 46,556,271 Terra Classic USD (USTC) tokens in the Mirror Protocol.
Why USTC Burns Are Pivotal for Repeg Quest
If this USTC burn offer passes the threshold, Terra Luna Classic will see these 46M USTC tokens burned via contract migration. This has to do with TerraForm Lab’s bankruptcy, as the court has ordered the original issuer of both LUNC and USTC tokens to get rid of all remaining digital assets before winding down operations.
TerraForm Labs must execute these burns in exchange for bankruptcy protection by October 30, 2024. In one of the recent X Spaces, TerraForm’s current CEO, Chris Amani, explained to the LUNC community that Terra’s execs had to choose between burning the tokens or destroying private keys.
Choosing to burn, Terra recently temporarily opened the Shuttle Bridge, which had been inactive since the Terra ecosystem crash in May 2022. This court’s directive has allowed the blockchain’s users to redeem the wrapped assets on Terra Luna Classic Layer-1.
TerraForm Labs gave the community a 30-day window to withdraw assets from the cross-chain bridge and assured that all remaining assets would be burned as the deadline kicked in.
USTC, LUNC Syrocket 10% on Proposal Grant
As the voting just ended, Terra Luna Classic’s stakers and validators have successfully approved the USTC burning proposal. Following today’s developments, the malfunctioning stablecoin tacked an immediate 10.7% upswing.
Riding the bullish wave to $0.025, USTC has posted its best result in three months, but the price is still far away from the original $1 USTC peg.
Meanwhile, LUNC heated up for a slight 2.5% daily rally, now approaching $0.0001. Last Thursday, LUNC briefly picked up this level to trade at $0.0001052 but was rejected back to four-zero territory the following day.
This mostly happened because Terra Luna Classic’s trading volume did not pick up during the 10% 7-day run on both Spot and Derivatives markets. The slim crypto market depth can create additional challenges for the LUNC price if the market’s sentiment suddenly turns bearish.
LUNC’s community is trying to solve this issue via the Tax2Gas mechanism, which is set to triple LUNC’s mandatory burns from 0.5% to 1.5% on each transaction. While this is a huge stride towards Terra Luna Classic’s revitalization, most of the community agrees that demand is just as important as supply reduction.
On the Flipside
- Aside from the TerraForm Labs Chapter 11 bankruptcy related Terra Classic burns, the community is waiting for the monthly LUNC burn from Binance.
- The leading exchange by trading volume burns Terra Luna Classic at the beginning of each month, derived from fees accumulated from the relevant pairs.
Why This Matters
Burning the overminted supply in bulk can drastically improve the coin’s supply dynamics, potentially making the altcoin more attractive to current and incoming investors.
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