The Terra Classic community, a fork of the original Terra network that collapsed in 2022, has voted to end the minting and reminting of its USTC stablecoin. The proposal, which received 59% of the votes, aims to protect the community and investors who have been burning USTC in hopes of restoring its peg to the US dollar.
However, since the depegging of the original Terra UST stablecoin and the LUNA governance token in May 2022, USTC has been trading well below its target price. According to Coingecko, USTC is currently worth $0.01263788, a far cry from its intended value.
Terra Classic Community is Working Hard to Save the Project
The Terra Classic community said that any form of minting or reminting of USTC would go against the community’s efforts to re-peg the stablecoin.
The community also said that the proposal would open the door for institutions like Binance, which accounts for 26% of the LUNA trading volume, to start burning USTC with confidence. LUNA is the native token of the Terra Classic network, which allows users to stake and participate in governance.
The Terra Classic network emerged as a separate network after the original Terra network, which was once the fourth-largest stablecoin by market cap, suffered a catastrophic collapse that triggered a market-wide crash.
The original Terra network used a dual-token system, where UST and LUNA were supposed to balance each other’s supply and demand. However, a series of events, such as a hacker attack, a liquidity crisis, and a regulatory crackdown, caused both tokens to lose their peg and value.
The Terra Classic community has been trying to revive the network and the stablecoin but with little success. The community said that the proposal to end USTC production was a “final attempt” to save the project. However, some critics have argued that the proposal is too late and too little and that the network is doomed to fail.