In a significant development, the Terra Classic community has chosen to end the minting and reminting of Terra Classic USD (USTC) tokens, marking a pivotal moment more than a year after the catastrophic collapse that sent shockwaves through the cryptocurrency markets.
The week-long voting process, which concluded on September 21, saw approximately 59% of the community in favor of terminating all minting activities, while around 40% voted against the proposal. A small percentage, just under 7%, opted to abstain from voting altogether.
The community explained that the primary objective of this proposal is to “protect the community and outside investors who are burning USTC” in pursuit of achieving a re-peg. They argued that Any form of minting would run counter to the community’s collective efforts.
The Terra UST stablecoin’s dramatic collapse last May, along with the depegging of the LUNA governance token, triggered panic selling and led to Terra’s value plummeting to approximately $0.13. The once-mighty Terra, once the fourth-largest stablecoin by market capitalization, saw its fortunes dwindle, and LUNA’s value plunged to just a fraction of a penny.
From the ashes of this crisis, the Terra Classic community emerged as a distinct network that allowed for the staking of LUNA on its blockchain. Remarkably, despite the turmoil in the original network, LUNA still boasts an estimated market capitalization exceeding $361 million, as reported by CoinGecko.
In January, the Terra Classic project received a significant boost when Binance committed to supporting an upgrade to the network that would eliminate the re-minting of burnt Terra Luna Classic (LUNC) tokens. This upgrade garnered strong support, with approximately 66% of the network’s voters endorsing it, with an overwhelming 96% favoring the change.
In the recent proposal, the Terra Classic community emphasized that this move “opens the door for institutions like Binance to start burning USTC,” given the assurance that all minting and re-minting activities are being brought to an end.
“Burning” refers to permanently removing a cryptocurrency token from circulation by sending it to an irretrievable wallet, known as a burn address.
Data from Coingecko reveals that Binance accounts for about 26% of all LUNC trading volume, with an estimated 5.8 trillion LUNC tokens still in circulation. With the decision to halt minting and reminting, the Terra Classic community aims to usher in a new era of stability and trust in its ecosystem.
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