Terra Classic Community Votes to End Minting, Reminting of USTC Tokens

The Terra Classic community has voted to end the minting and reminting of Terra Classic USD (USTC) tokens more than a year after its collapse sparked a widespread meltdown in cryptocurrency markets.

A week of voting on whether or not to end the token concluded on September 21, and ended with about 59% of the community in favor of ending all minting activities. About 40% voted against the proposal, while just under 7% of voters chose to abstain.

In a post, the community said the proposal aims to “protect the community and outside investors who are burning USTC” to achieve a re-peg. Any form of minting, it said, would go “completely against any community effort.”

Last May, the Terra UST stablecoin collapsed spectacularly after it and the LUNA governance token lost their peg, sending holders fleeing for an exit. After the depegging, Terra—once the fourth biggest stablecoin by market capitalization—collapsed to just about $0.13, and LUNA’s worth reached about a fraction of a penny. 

From the ashes of the Terra ecosystem, the Terra Classic community emerged as a separate network that allowed staking of LUNA on its blockchain. Despite the collapse of the original network, Luna still has an estimated market cap of just over $361 million, according to CoinGecko.

The project was given a boost in January when Binance agreed to support an upgrade to the network that would eliminate the re-minting of burnt Terra Luna Classic (LUNC) tokens. This proposal was supported by a 66% majority of the network’s voters, with about 96% voting in favor of the upgrade.

In the most recent proposal, the Terra Classic community said that the move “opens the door for institutions like Binance to start burning USTC” with the knowledge that any minting and re-minting is over.

Burning is the process of removing a cryptocurrency token from circulation and sending it to a wallet from which it can never be retrieved, also known as a burn address. 

Data from Coingecko shows that Binance accounts for about 26% of all LUNC trading volume, and that there are an estimated 5.8 trillion LUNC tokens still circulating.