Terra Classic (LUNC) Community Warned Over 800M USTC Wallet Blacklisting

The Terra Classic (LUNC) community has received a warning to exercise restraints in taking USTC and LUNC trading positions in the wake of the blacklisting of the 800 million USTC wallet.

The warning came from community member Rexyz, who claimed that the new circulating supply showcased on CoinMarketCap might not accurately depict the liquidity of the algorithmic stablecoin.

USTC Wallet Blacklisting: The Issue

The Terra Classic community is considering the move to revitalize both LUNC and USTC. Part of the efforts to achieve this periodically burning the assets. Recently, the community passed a proposal to blacklist a wallet containing 800 million USTC tokens after months of discussions about the tokens’ potential burning.

While contentious, proponents argued that blacklisting is the only feasible move to persuade the owners of the wallet to contribute to the ultimate effort to repeg the token. 

With the passage of the proposal, the implementation of the plan to tweak the codes to reflect the changes came on Oct. 20 with moves to update USTC data on CoinMarketCap set in motion.

Notably, the warning from Rexyz sharply contrasts the claims from Vegas, one of the key proponents of the move. While Vegas affirmed the code implementation for the blacklist and update on CoinMarketcap, the caution from Rexyz alleges that the “blacklisting has not actually taken place in the code” at the time he published his post.

To buttress his claims, Rexyz argued that the blacklist comes with no legal document to show it is legal. Rexyz’s comments also underscore the need for caution in the wake of potential massive volatility. However, these claims remain unsubstantiated as of press time.

Overnight, USTC recorded a jump of 7.30% with the price pegged at $0.0123. Amid the hype surrounding the wallet blacklist, the trading volume soared 251% to $18.1 million as market capitalization hits $110.38 million.

Doubling Down on USTC Repeg Efforts

The reign of USTC (formerly UST) as the pioneering algorithmic stablecoin was short-lived when the token lost its $1 peg last year, dragging LUNA down with it. The community remains steady in changing the outlook, and the push has garnered support from top industry giants like Binance.

The effort to fuel USTC repeg is not only confined to burning. The core team managing the protocol recently passed Proposal 8813 to issue 1.6 million USTC toward the running of the Terra Classic grant program. Despite the consistency of these efforts, USTC remains down by 98% from its All-Time High (ATH) of $1.05.