In a recent development within the Terra Luna Classic (TerraLC) ecosystem, a highly debated proposal aimed at reviving the LUNC token and pegging USTC back to $1 through the reintroduction of the market swap function with a limiter has been rejected by the community. Despite garnering support from a significant portion of validators, the proposal failed to surpass the “pass threshold.”
The Terra Luna Classic network, still reeling from the 2022 Terra-LUNA crisis, had its market swap function for the LUNC and USTC tokens disabled as a precautionary measure. This feature was seen as instrumental in potentially restoring LUNC’s price to $1 and re-establishing the peg of USTC to $1.
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Proposal 11767: “Test Market Swap with Mint Limiter”
The proposal, known as “Test Market Swap with Mint Limiter” (Proposal 11767), was intended to re-enable the market swap function, but with added safeguards in the form of a mint limiter. This approach was believed by proponents to reduce the circulating supply of both LUNC and USTC, aligning with the community’s vision of achieving the $1 peg for USTC and a resurgence of LUNC’s price.
Contentious Debates at Terra Luna Classic
However, not everyone within the TerraLC community supported the proposal. The L1 Terra Classic Task Force (L1TF) and the Quant developer teams argued against re-enabling the market swap function with a limiter at this time, citing resource concerns.
There seems to be a lot of false/accusatory information flying around about this, so I'll just clarify for everyone.
The Quant team asked to evaluate the proposal on testing the creation of minting caps and switching back on the AMM. Firstly, we did commend @igorsoares62 on… https://t.co/xDhkYEJcnD
— RedlineDrifter (@RedlineDrifter) September 7, 2023
One of the key objections came from a Quant team member, RedlineDrifter, who raised concerns about the market module’s reliability and potential issues. This dissent led to Allnodes, a validator holding 17.25% of the voting power, refusing to support the proposal.
Validator Votes
The proposal faced a deeply divided response from validators within the Terra Luna Classic ecosystem. Among the 38 validators who cast their votes, 17, including Interstellar Lounge, Stakely, JESUSisLORD, and TerraCVita, were in favor of the proposal. However, an equal number of validators, including Allnodes, HappyCattyCrypto, and TCB, rejected it.
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In the final tally, the proposal received 45% “Yes” votes, 50% “No” votes, and 5% “Abstain” votes, ultimately falling short of the “pass threshold.”
Outcome and Implications
The rejection of Proposal 11767 signifies a significant division within the Terra Luna Classic community regarding the path forward for the network’s stability and the revival of LUNC and the USTC peg. With the proposal failing to gain approval, it remains uncertain when or if the market swap function with a limiter will be reinstated and whether Terra Luna Classic can achieve its goal of restoring both token values to $1.
As the TerraLC community continues to navigate these challenges, it remains to be seen how consensus can be reached on the most effective strategies for the network’s revival and the stability of its native tokens.