- Terra Classic community halts the minting and re-minting of Terra Classic USD (USTC) to restore its peg to the U.S. dollar.
- The last week saw a surge in LUNC demand, signaling renewed optimism within the Terra Classic ecosystem.
The Terra Classic community, steering the governance of the blockchain, has cast a unanimous ballot favoring the cessation of minting and re-minting activities of its stablecoin, Terra Classic USD (USTC), as part of an elaborate scheme to reinstate its dollar parity. This maneuver emanates from a cognizant endeavor to resuscitate the value of USTC post the May 2022 debacle, that saw the Terra blockchain encounter a severe setback.
The Backdrop of Repositioning
Preceding the calamitous events of May 2022, the Terra blockchain proffered a facile channel for users to inter-switch between USTC and LUNA. However, the paradigm shifted drastically post-collapse, hurling the system into a minting spree of LUNA tokens in a bid to re-peg the stablecoin. The incessant minting fueled a downside trajectory for LUNA’s price, which in turn exacerbated USTC’s deviation from the $1 mark.
The proposal tabled before the Terra Classic community emphasized a collective endeavor to incinerate the USTC tokens as a step towards re-pegging. At the time of press, the erstwhile “stablecoin” traded at a paltry $0.012, as per the data extricated from CoinMarketCap.
LUNC Gathers Steam
Amidst the unfolding scenario, LUNC, the governance token, is experiencing a revival of sorts. The last week witnessed a buoyed demand for LUNC, propelling its value by nearly 10%, a positive indicator seen by many as a precursor to restoring USTC to its dollar peg.
The trading sphere delineated a growing accumulation trend among spot traders. Key momentum indices scrutinized within a 24-hour ambit showcased figures leaning towards overbought highs, an early harbinger of increased accumulation over distribution. Concurrently, LUNC‘s Exponential Moving Average (EMA) rendered a bullish narrative, further emboldening the optimistic ethos within the Terra Classic community.
Futures Traders Eye LUNC
As LUNC notches upward, the futures market too is mirroring a burgeoning interest. Data gleaned from Coinglass illustrates a substantial uptick in open trades concerning LUNC, with Open Interest swelling by over 30% in the last two days, standing at $4.46 million at press time.
The re-pegging strategy delineated by Terra Classic is not merely a reactive mechanism, but reflects a proactive engagement to restore equilibrium to USTC’s valuation, and by extension, invigorate the broader Terra Classic ecosystem.