In the wake of the infamous Terra collapse in May 2022, the Terra Classic community has been tirelessly seeking ways to recover their investments and restore the project’s once prestigious status in the cryptocurrency ecosystem. Two new proposals, #11785 and #11786, have emerged on the Terra Classic governance forum, offering innovative solutions to these challenges.
Proposal #11785: Binance’s Role in Re-Pegging USTC
Proposal #11785 seeks to implement new measures aimed at helping the grossly depegged TerraClassicUSD (USTC) stablecoin regain parity with the US dollar. The core idea behind this proposal is to compel one of the world’s leading cryptocurrency exchanges, Binance, to burn 50% of the trading fees it collects from USTC trading pairs on its platform. Binance already burns 50% of the monthly trading fees it accumulates for Terra Classic (LUNC) pairs. This proposal intends to extend this provision to USTC pairs, including USTC/USDT and USTC/BUSD, which have seen a combined trading volume of approximately $5 million in the past 24 hours.
The rationale behind this move is that having a major exchange like Binance participate in burning a portion of the USTC supply could significantly aid in re-pegging the stablecoin to the USD. Additionally, it might have a positive impact on the value of LUNC. The proposal argues that such a step could encourage other exchanges to follow suit, ultimately benefiting investors holding USTC or LUNC.
At the time of writing, 40.74% of voters support the introduction of a USTC burn program by Binance. However, 57% of voters have chosen to abstain from voting, with just 1.87% directly opposing the move. Supporters of Binance burning USTC hope the proposal gains the remaining 4.4% of participation required to reach quorum, along with additional votes in its favour.
Proposal #11786: Limiting USTC Minting
Running concurrently with Proposal #11785, Proposal #11786 aims to limit USTC minting. This proposal suggests that any USTC minting offer should be subject to community voting, and it seeks to close any existing loopholes that contribute to the expansion of the stablecoin’s supply.
Currently, this proposal is hotly contested, with its outcome likely to impact the related Proposal #11785, which calls for Binance to burn USTC. Currently, 47.32% of votes favour the minting limitations, while 44.34% oppose the move.
Regardless of the outcomes of these proposals, it’s evident that the Terra Classic community is engaged in a highly ambitious mission to re-peg USTC’s value back to the USD. Currently trading at $0.012, USTC has seen a modest 1% gain in the past 24 hours, underscoring the community’s determination to restore its stability and reputation in the cryptocurrency market.
The cryptocurrency world will be closely watching as these proposals unfold, as their success or failure could have far-reaching implications for the Terra Classic ecosystem and the broader cryptocurrency landscape. Stay tuned for further developments on this front as the Terra Classic community continues its efforts to recover and rebuild.