Terra Classic Pushes to Bring LUNC and USTC to $1 as Proposals to Burn 800M USTC Pass

The Terra Classic community remains dedicated to bringing LUNC and TerraClassicUSD (USTC) to $1 as two proposals seeking to return and burn 800 million USTC recently passed.

The Terra Classic (LUNC) community has passed two crucial proposals as they move towards re-pegging the TerraClassicUSD (USTC) stablecoin. These proposals aim to return 800 million USTC to the community pool and burn the tokens to reduce the extensive USTC supply.

The USTC Proposals

A prominent LUNC community member, Vegas, submitted the first proposal, “Proposal 11658,” on July 30. It advocated the return of on-chain funds to the Terra Classic community pool. 

The specific multi-sig address in question holds a substantial amount of 800 million USTC. The Terra ecosystem initially earmarked the funds for underwriting capacity for the Ozone Protocol in March. However, they were not fully utilized as intended due to deviations from the proposed development plan.

The proposal aimed to channel the funds back to the Terra Classic community pool. The LUNC community has passed this proposal with a 70% vote of confidence.

The momentum didn’t stop there, as the second proposal, “Proposal 11660,” swiftly followed on July 31. This proposal, intricately linked with the first, advocates for the complete burning of the funds upon their return to the community pool. 

The community has also passed the second proposal as of press time. The proposal garnered an impressive 82.55% vote of confidence. The LUNC community’s proactive stance is evident in the overwhelming support for both proposals.

While burning the 800 million USTC would not automatically re-peg the stablecoin, it is a step toward reducing its supply. Recall that USTC de-pegged from the dollar in the May 2022 Terra collapse due to an over-minting issue which led to inflation.

1B USTC Sent to Risk Harbor

Notably, the 800 million USTC set to go to the burn address is part of the 1 billion USTC reserved last March by the Terra ecosystem. The Luna blockchain, under Kwon, sent 1 billion USTC to a multi-sig address controlled by the Ozone Protocol (now known as Risk Harbor).

This decision was in response to the demands of the growing Terra ecosystem. The initiative aimed to reserve a substantial amount for developing TeFi and other ecosystem projects. 200 million USTC was subsequently sent to exchanges, leaving only 800 million USTC in the address.

However, Risk Harbor’s development did not come from the allocated funds. This resulted in the funds remaining in the multi-sig address to this day. The community seeks to return the funds to the community pool and burn them.

Meanwhile, amid the passing of these proposals, the USTC Quant Team continues to make significant progress in the re-peg initiative. Most recently, Redline Drifter, the initiator of the Divergent Protocol model, introduced the Quant Simulation tool to welcome community participation.