coinpedia.org
Dark Clouds have always encircled the terra community, and minting is not new in the ecosystem. Recently, in response to the UST de-pegging crisis, the Terra Classic community has taken a crucial step to salvage the struggling Terra Classic UST tokens.
A proposal was made to discontinue the UST-LUNA swapping mechanism, allowing users to interchange UST and LUNA freely. While this mechanism had its merits, it had proven to be a double-edged sword during times of crisis.
This move comes after a similar crisis unfolded in May 2022, when USTC debugged from the U.S. dollar. This event triggered a catastrophic collapse in Terra and was closely tied to Luna Classic (LUNC). LUNC’s value plummeted by nearly 100%, contributing to a broader downturn in the crypto markets, resulting in a staggering loss of approximately $40 billion in total market capitalization.
Minting or Reminting: What’s the Take?
To solve the crisis and save the ecosystem, the community voted on the proposal to halt all minting and reminting of USTC. This proposal received 59% support from the community. USTC, the unstable coin at the epicenter of the Terra ecosystem, collapsed last year and saw its value drop to mere pennies. Meanwhile, LUNC’s supply surged significantly.
Pricing to Take a Back Seat
Interestingly, the proposal’s objective is to accelerate the burning of LUNC tokens, potentially increasing their value and ultimately restoring the value of USTC. However, achieving this outcome is considered an uphill battle. Following the approval of the proposal, the price of USTC saw a 3.9% increase, reaching $0.0129. This move reflects a positive trend over the last 30 days. LUNC also experienced a 2% gain, with an 8.3% increase in value over seven days.
What Next?
The voting proposals aren’t just about governance; they show the community’s determination in a crisis. USTC is trading at only $0.013044, far from its intended value. We’ll have to see if these new proposals bring stability and vitality to Terra Classic.
Also, the SEC’s take to depose former Terra CEO Do Kwon is creating panic in the Terra community as it may impact the ill-fated users who lost their hard-earned money in the Terra collapse. Is SEC’s move in line to find any suspicious link with Binance as they are also investigating their past trading activities?