The Terra Classic community has approved a significant proposal to burn 800 million USTC tokens (approximately $32 million) to reduce its circulating supply and potentially impact its long-term price. This development, documented in Proposal 12073, marks a major step for the community following extensive debate and voting.
Community Votes to Burn USTC
- Proposal 12073 received overwhelming support from the community, exceeding the required “pass threshold.”
- 42 out of 58 validators voted in favour of the burn, with 11 abstaining and 5 opposing or vetoing.
- Top validator Allnodes abstained, allowing the community to proceed with the burn.
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Burning Mechanism and Potential Impact
- The proposal utilizes code migration to move the USTC from the Risk Harbor multisig wallet to a new contract version.
- This process automatically handles any taxes associated with the burn transaction.
- Burning a significant amount of USTC could potentially increase its scarcity and influence its price in the long term.
- However, the long-term price impact remains uncertain subject to various market forces.
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Market Reaction
- Following the approval, USTC price surged 25%, reaching $0.040, but has since corrected to $0.03535.
- LUNC price also experienced a positive reaction, increasing 6.88% over the past week and 1.14% over the past 24 hours.
This decision signifies the Terra Classic community’s active role in shaping the project’s future. The potential long-term impact on USTC price and the overall trajectory of both LUNC and USTC remains to be seen, but this development adds another layer of intrigue to the ongoing story of the Terra ecosystem.