The long-awaited Zaradar’s Terra Classic re-peg proposal is out and awaits the community debate on it, there has been a spike in both the USD stablecoin and LUNC token following its release.
Terra USD Reacts To The Re-Peg Proposal
The price of the USD stablecoin spiked over 13% in the last 24 hours, trading at $0.03311, while the LUNC token’s market cap spiked over 14%, adding about $50 million, while the trading volume has surged by over 700%, now at about $76.7 million.
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Terra Classic Re-Peg Proposal
Recall that there has been a lot of noise in the community over the issue of Terra re-peg as Alex Forshaw released a token which will request the community to mint another 500 billion LUNC tokens. The idea threw the community into a sea of confusion as another developer, Tobias Andersen AKA Zaradar, came out to refute the idea of the proposal that re-pegging Terra doesn’t have to do with minting new tokens.
Zaradar’s proposal clearly shows that he has chosen to follow the way of quantitative tightening in his proposal to see the defunct stablecoin recover its dollar peg.
In the proposal, it could be read that in addition to tax burns and increased rates of staking rewards, it recapitalized USTC by adding new features like “partitioned pools” and eventually re-enabling swaps with improved safeguards against volatility.
Via this partitioned pool, there are going to be rooms for startups on the network to release new tokens basically for commercial activity in the pool.
It is worth noting that pools are capitalized with Terra Luna Classic (LUNC), while bi-directional swaps with USTC will enable these “commodity tokens” to leave the pool.
Zaradar To Clarify Some Areas In His Proposal
Although there are still areas in the proposal that are still uncleared, for instance, the author often notes that a host of features will need to be implemented to allow for network growth, ensure economic stability, allow for better capital controls, etc., to attract the needed capital. However, these new features are not stated.
In this view, Zaradar has initiated a follow-up to clarify the complicated part of the proposal.
Some of the influential voices in the Terra classic community and one of its developers have shown support for Zaradar’s proposal. For instance, Vegas says; “This is a view for the re-peging of USTC that I fully support. On this proposal, the #LUNCcommunity does not have to suffer again. We don’t need any more minting.”
Classy Crypto, one of the community’s biggest influencers, described it as the best re-peg proposal he has read.
Also, Alex Forshaw, the developer who first release a proposal on the re-pegging commented on Zaradar’s proposal saying Zaradar should be allowed to shed more light on these things in follow-up interviews.
At the moment, the two proposals await the community debate on which one to go with.