In a significant stride towards stabilizing the TerraClassicUSD (USTC) stablecoin, the Terra Classic (LUNC) community has successfully passed two pivotal proposals. These initiatives are aimed at restoring equilibrium to the USTC stablecoin by addressing the extensive supply and facilitating a gradual re-pegging process.
1st Proposal
The first proposal, known as “Proposal 11658,” was submitted by a prominent LUNC community member named Vegas on July 30. This proposal advocated for the return of a substantial amount of USTC, totalling 800 million, to the Terra Classic community pool. The funds in question were originally allocated for the underwriting capacity of the Ozone Protocol back in March. However, due to deviations from the proposed development plan, these funds were not fully utilized for their intended purpose.
The primary objective of Proposal 11658 was to channel the 800 million USTC back into the Terra Classic community pool, where they can potentially be repurposed for community initiatives. The proposal garnered a vote of confidence from the LUNC community, with an impressive 70% in favour of its implementation.
2nd proposal
Building on the momentum of the first proposal, the second proposal, named “Proposal 11660,” swiftly followed on July 31. This proposal was intricately linked with the first and advocated for the complete burning of the 800 million USTC upon their return to the community pool. The community recognized that while burning these tokens would not automatically re-peg the stablecoin, it would be a significant step towards reducing the supply of USTC, thereby aiding in the re-pegging process.
Proposal 11660 gained substantial support from the LUNC community, amassing an impressive 82.55% vote of confidence, highlighting the community’s proactive stance in addressing the USTC stability concerns.
It’s worth noting that USTC faced a de-pegging issue from the dollar in the aftermath of the May 2022 Terra collapse. The collapse was attributed to an over-minting issue that led to inflation. To combat this, the Terra ecosystem reserved a significant amount of USTC, 1 billion to be precise, in March of the same year. This allocation was intended to fund the development of TeFi (Terra Finance) and other ecosystem projects.
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However, only 800 million USTC remained in a multi-sig address controlled by the Ozone Protocol (now known as Risk Harbor) as the allocated funds went unused due to deviations in the development plans. The LUNC community, with a forward-thinking approach, sought to return the unused funds to the community pool and subsequently burn them to help stabilize the USTC supply.
Quant Team makes continuous progress amid USTC Proposals
Amid the success of these crucial proposals, the USTC Quant Team continues to make noteworthy progress in the re-pegging initiative. Recent development includes the introduction of the Quant Simulation tool by Redline Drifter, who initiated the Divergent Protocol model. This tool is designed to engage the community in the re-pegging process, fostering participation and transparency in this endeavour.
In conclusion, the Terra Classic community’s unanimous support for these proposals underscores its commitment to restoring USTC stability and driving the ecosystem towards a balanced and sustainable future. As these measures are implemented, the community eagerly anticipates the positive impact they will have on the Terra Classic ecosystem.
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