The Terra Classic (LUNC) community has recently made a significant decision to reshape the trajectory of the project. They have officially approved the proposal to cease the process of minting and are reminded of USTC, the stablecoin associated with Terra Classic. This bold move follows the community’s desire to restore USTC’s peg to $1 and rejuvenate the LUNC token. The approved proposal is known as Proposal 11784, “ Stop Minting and Reminting of USTC” and marks a pivotal junction on the journey of Terra Classic.
About LUNC
Terra is a blockchain protocol that sets itself apart using fiat-pegged stablecoins to drive the establishment of a global stable payment system. The native token of the original Terra Blockchain is Luna Classic designated by the ticker symbol LUNC. It was launched in 2018 and acted as a twin token designed to absorb any fluctuations in the blockchain’s algorithmic stablecoin, TerraUSD (UST). However, in May 2022 the blockchain’s algorithm stablecoin, TerraUSD (UST) collapsed and the community voted on the creation of a new blockchain. The new blockchain was named Terra 2 with LUNA as its native token, while the original blockchain’s currency was rebranded to LUNA classic.
Terra maintains its one-to-one peg through an algorithm that automatically regulates stablecoin supply according to the market demand. This is achieved by incentivizing the LUNC token holders to swap LUNC and stablecoins at a profitable exchange rate. These swaps are strategically employed to either expand or contract the supply of stablecoin to match the market demand.
Halt on Minting and Reminting of USTC
The Terra Classic community is grappling with the issue related to its peg with the US dollar. Keeping stability at paramount, the community has voted in favor of Proposal 11784 which aims to bring an end to the minting and reminting of USTC. As per the reports on the voting, 59% of the community voted in favor of the proposal, 40% against and the remaining 7% chose to withhold their vote. The community stated in the post that the primary goal of the proposal is to safeguard the community and outside investors burning USTC to achieve re-peg.
Another important aspect of the proposal is the involvement of cryptocurrency exchange giants like Binance. It opens the doors for Binance to initiate the burning of USTC tokens which could play a significant role in Terra Luna Classic community achieving their goal of pegging USTC to $1.
Impact on the Price of LUNC
The proposal might have a significant impact on the price of the token, with LUNC leading the top 100 cryptocurrencies in terms of gains as of the 22nd of September. The token has contributed around $30 million to its market capitalizations in a 24-hour period owing to its dramatic surge of 7.77% in a single day. In the rankings, Zilliqa (ZIL) and ApeCoin (APE) are in the second and third positions, respectively, with gains of 6.19% and 2% among the top 100 cryptocurrencies over the last 24 hours.
The Terra Classic community’s decision to halt the minting and reminting of USTC and Involve companies like Binance marks a major milestone in their journey towards stability. The positive impact of the proposal is already creating a wave in the cryptocurrency industry with a surge in the token’s price. However, it is important for the investors to remain informed as the LUNC trading position is below the 200-day simple moving average, which is a potential indication of price vulnerability in the future.
Disclaimer: This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
