Terra Classic Community Votes on Proposal for Binance to Burn 50% of USTC Trading Fees
The Terra Classic community is currently engaged in a significant decision-making process, voting on a proposal that could have far-reaching implications for the stability of the USTC stablecoin and the Terra Classic blockchain. The proposal, known as Proposal #11785, aims to collaborate with Binance, the world’s largest cryptocurrency exchange, to burn 50% of the trading fees generated from USTC trading pairs.
USTC is an algorithmic stablecoin that operates on the Terra Classic blockchain. However, it experienced a significant de-pegging event following the Terra collapse in May 2022. To address this issue and restore USTC’s value to its peg of $1, the Terra Classic community has been actively pursuing various strategies.
Prior initiatives include the successful passage of a proposal to create a USTC repeg team and another proposal in August to burn 800 million USTC tokens, both aimed at supporting the repeg process and the recovery of the Luna Classic (LUNC) token.
The Rationale for the Proposal
Proposal #11785 seeks to extend Binance’s existing practice of burning a portion of monthly trading fees for Terra Classic (LUNC) pairs. These pairs have demonstrated substantial trading volumes, with approximately $5 million in the past 24 hours alone. By involving Binance, the world’s largest crypto exchange, in this burning process, the Terra Classic community aims to achieve several key objectives:
- Stabilizing USTC: The primary goal is to restore USTC’s peg to $1 by reducing its circulating supply through regular burns, thereby enhancing its stability as a stablecoin.
- Incentivizing Adoption: By showcasing Binance’s participation in the burning process, this initiative hopes to inspire other cryptocurrency exchanges to adopt similar practices for Luna Classic (LUNC) pairs. This could potentially lead to more widespread support for USTC’s stability.
Voting Progress
As of the time of writing, 43.34% of validators have cast their votes. Of these votes, 43.08% (19 validators) are in favour of the proposal, while 9.59% (4 validators) have voted against it. One validator, representing 0.14%, has cast a veto vote. Additionally, 47.18% (6 validators) have abstained from voting. There are 92 validators yet to vote, and the voting period is set to conclude at 12:43:49 on September 21.
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Despite influential figures like JESUSISLORD (@ForTheCross_CH) advocating for the proposal on various platforms, the voting turnout has been lower than anticipated. This reflects the community’s strong desire to persuade Binance to implement a monthly burning mechanism for USTC, aligning it with the 50% monthly burning of LUNC.
I voted YES on #LUNC governance proposal #11785 to request Binance to burn 50% of their USTC fees like they burn 50% of their LUNC fees. I have supported Binance burning their USTC fees for some time https://t.co/qHTEQxDJJe, and it will be up to Binance to consider our request if… pic.twitter.com/3whqbzQIwi
— JESUSisLORD (@ForTheCross_CH) September 14, 2023
Binance’s Significant Contribution
Binance’s potential involvement in this initiative cannot be understated. The exchange has played a crucial role in the burning of Luna Classic (LUNC) tokens, having already burned nearly 38 billion LUNC tokens. If Binance adopts this proposal, it could significantly advance the Terra Luna Classic community’s objective of reestablishing USTC’s peg to $1.
The Terra Classic community eagerly awaits the outcome of the vote, as the decision could shape the future of USTC and the stability of the Terra Classic blockchain. Stay tuned for further developments in this pivotal decision-making process.
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Dr. Olajide Samuel juggles the demands of medical studies with a passion for cryptocurrency. A seasoned blogger, Olajide shares his vast global knowledge of the crypto space, offering insights to enthusiasts. Despite his busy schedule, his commitment to crypto remains strong, and he actively seeks ways to contribute to its future.
