- Two significant proposals, aiming to return and burn 800 million USTC, pass with high community support.
- The moves follow USTC’s de-pegging from the dollar in 2022 after over-minting complications.
Terra Classic’s Collective Decision: Towards Rebalancing USTC
Within the Terra Classic ecosystem, the community’s dedication is unquestionable. Their collective drive to restore the value of LUNC and TerraClassicUSD (USTC) to $1 has been showcased recently through the unanimous support for two pivotal proposals, both geared towards addressing the expansive USTC supply.
Delving into the USTC Proposals
A leading figure in the LUNC community, Vegas, introduced the first of these proposals – “Proposal 11658” – on July 30. This proposal was centered on channeling on-chain funds, particularly a significant sum of 800 million USTC initially set aside for the Ozone Protocol’s underwriting in March, back to the Terra Classic community pool. It’s worth noting that these funds didn’t serve their original purpose due to some shifts from the planned developmental roadmap. With a 70% vote backing, the community decided to return these funds.
Hot on its heels, the community saw “Proposal 11660” on July 31. This subsequent proposal, directly related to its predecessor, rallied for the absolute incineration of these funds once they rejoined the community pool. The endorsement was even more emphatic this time, securing an 82.55% affirmative vote. The burning of these 800 million USTC tokens is anticipated to be a significant stride towards its supply reduction. This is especially vital considering USTC had previously diverged from the dollar parity during the Terra debacle in May 2022, a consequence of an overproduction glitch causing inflation.
An interesting sidebar in this narrative is the allocation of 1 billion USTC by the Terra ecosystem, overseen by the Luna blockchain, to an address managed by what is now recognized as Risk Harbor (previously Ozone Protocol). This was orchestrated to nurture the blossoming Terra ecosystem, with ambitions of fostering development in TeFi and similar projects. However, a chunk of these funds, 200 million USTC to be precise, was transferred to exchanges, leaving the aforementioned 800 million USTC untouched in the address.
As these proposals ascend to approval, the USTC Quant Team’s endeavors in the re-pegging initiative shouldn’t go unnoticed. The recent introduction of the Quant Simulation tool by Redline Drifter, the mastermind behind the Divergent Protocol model, stands as testament to the team’s relentless pursuit of stabilization and community inclusion.