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HomeCrypto NewsMarketNew Terra Classic Re-peg Proposal Faces Stiff Resistance From LUNC Community

New Terra Classic Re-peg Proposal Faces Stiff Resistance From LUNC Community

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Some members of the Terra Rebels have made a new proposal to restructure USTC, but there is a catch.

In a tweet on Monday, Alex Forshaw, a member of the Terra Classic developers group, the Terra Rebels, shared an updated re-peg proposal to help restructure TerraClassicUSD (USTC) by creating an “algorithmic fungible token (AFT).”Β 

According to the proposal authored by Forshaw, Edward Kim, and Maximilian Bryan, the Terra Rebels will create a new AFT dubbed USTN. The new token, which in most ways bears similarities with a stablecoin, will then be backed mostly by Bitcoin. Furthermore, the group will airdrop the new token to USTC holders.

However, the catch is that the Terra Rebels plan to mint 500 billion LUNC to purchase Bitcoin.

As justification for the pain this plan is sure to cause LUNC holders, the group asserts that the adoption of USTN will lead to faster LUNC burns. As per the proposal, about $5 billion in the adoption of USTN will burn about 2.5 trillion LUNC. Notably, the group believes this is achievable in a year.

Unsurprisingly, the idea of minting more LUNC has not gone well with many in the LUNC community, which has built its clarion call for revival around reducing LUNC supply.

The Community Response

LUNC Burn, an unofficial Twitter account dedicated to tracking LUNC burn activity that has gained a huge following in recent months, described the proposal as crazy and “out of touch.” According to LUNC Burn, it is a step backward, considering the burn initiatives that have already been implemented.

The LUNC burn tracker noted that the plan would not be as easy as it seems as it will require the token to get listed on exchanges which is an uphill task. Additionally, he noted that the potential price dump would force most holders to sell before that time. So instead, LUNC Burn has urged the community to consider a proposal that Tobias Andersen is working on that will re-peg USTC, albeit slower.

LUNC DAO, a popular community validator also lending its opinion on the proposal, said it was a “bad idea.”Β  Additionally, the validator highlighted that burning remains the primary narrative driving revival.

Notably, as responses continue to pour in, one of the proposal’s authors and LUNC core developer, Edward Kim, has called on the community to keep the feedback constructive, urging others to submit their repeg proposals for the community to decide.

It bears mentioning that Kim is also the author of the proposed 1.2% tax burn proposal recently passed by the community to reduce the LUNC supply from 6.9 trillion to 10 billion. Notably, the burn is yet to live up to the expectations of many. For example, data shows that the tax in nearly two weeks has burnt only about 3.8 billion LUNC. Moreover, LUNC Burner estimates that it will take 25 years to reach the 10 billion supply target at the current burn rate.

Despite this, the community has been given a boost with support from Binance to burn all trading fees obtained from LUNC pairs. The leading exchange on Monday disclosed that it burned about 5.5 billion LUNC from trading fees between September 21 and October 1.

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Mark Brennan
Mark Brennan
Mark Brennan has been active in the cryptocurrency sector since 2014. His love and passion for the nascent industry drove him to develop interest in writing about important developments and updates about cryptocurrencies and blockchain. Brennan, who holds a Masters degree in Business Administration, learned about the potential of blockchain technology. Aside from crypto journalism, Brennan runs an education center, where he educates people about the asset class.

Disclaimer: The content is for informational purposes only, may include the author's personal opinion, and does not necessarily reflect the opinion of TheCryptoBasic. All Financial investments, including crypto, carry significant risk, so always do your complete research before investing. Never invest money you cannot afford to lose; the author or the publication does not hold any responsibility for your financial loss or gains.

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