Terra Classic Finally Passes Proposal to Stop USTC Minting in Push to Bring USTC to $1

The Terra Classic (LUNC) community has passed Proposal 11784, signaling the end of USTC reminting and minting, as plans to push the stablecoin to $1 progress.

This decision comes as part of a broader effort to restore TerraClassicUSD’s stability and bring it back to its intended peg of $1 after the tumultuous events that followed Terra’s collapse in May 2022.

The proposal, which had previously faced hurdles due to software upgrades, was reintroduced and garnered strong support from the Terra Classic community. 

It stipulates that all minting and reminting of USTC will cease without the explicit approval of the Terra Classic community, effectively closing any existing loopholes, including the conversion of xUST to mint USTC.

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The community’s resounding ‘YES’ vote, which secured 55.32% of the ballots, signifies widespread support for the cause. However, a notable 37.75% of the votes were cast in favor of maintaining the status quo with a ‘NO’ decision.

The Terra Classic community has actively moved to reduce the circulating supply of USTC through burns as part of the mission to re-peg it to $1. However, the constant minting and reminting of more tokens are counterproductive to this plan.

This move to stop reminting will safeguard the interests of the community and outside investors and open doors for institutional players like Binance to join the burning efforts now that minting and reminting have been terminated.

Plans to Re-peg USTC

Recall that the community recently passed a proposal requesting Binance to participate in USTC burning, allocating 50% of its USTC trading fees to the cause. This move would emulate the successful strategy employed with LUNC.

Last month, the community also approved the burning of 800 million USTC. These tokens were part of the 1 billion USTC initially sent to Ozone Protocol by Do Kwon in March. 

Despite these efforts, the challenge of reminting persisted, with over 225,000 USTC tokens reminted on Sept. 17. However, with the passage of Proposal 11784, the community expects this unwanted trend to stop.

The USTC Quant Team has been exploring avenues to re-peg the stablecoin. The team is currently engaged in discussions with centralized exchanges and potential partners to explore a Real World Asset (RWA) model for the stablecoin.