Can Terra Classic’s New Proposals Save USTC? Here’s Everything You Should Know

On Sep 19, 2023

Following the unsettling collapse of Terra in May 2022, the Terra Classic community is debating a new proposal aimed at restoring stability to its TerraClassicUSD (USTC) stablecoin. Central to the discussion is a proposition that nudges Binance, the world’s largest cryptocurrency exchange, to burn 50% of its USTC trading fees. This development adds another layer to the dramatic efforts to resurrect a project that once had a prominent standing in the crypto-verse.

Two closely related proposals have been put forth on the Terra Classic governance forum, and they’re drawing significant attention from the community. Read on.

Proposal #11785: Binance Burn Program for USTC

The first proposal, fittingly labeled #11785, primarily revolves around persuading Binance to expand its existing fee-burning mechanism to USTC trading pairs. Presently, Binance burns 50% of its trading fees from Terra Classic (LUNC) pairs. If this proposal garners acceptance, it would mark a substantial victory for the struggling USTC stablecoin. Binance facilitates trading pairs such as USTC/USDT and USTC/BUSD, collectively boasting a trading volume of approximately $5 million in the last 24 hours.

The rationale is clear-cut: if the world’s most influential cryptocurrency exchange burns a portion of the USTC supply, it stands to reason that this move could fortify efforts to re-anchor the stablecoin to the US dollar and potentially revitalize the value of its counterpart, LUNC.

Proposal #11786: Curbing USTC Minting

Running in parallel with the first proposal is another initiative, known as #11786, with the objective of restraining the minting of USTC. This initiative targets the closure of loopholes that enable unwarranted expansion of USTC’s supply. Here, the community is seeking a say in any prospective minting activities, thereby safeguarding against the arbitrary creation of the stablecoin.

Community Sentiments

As it stands, these proposals have generated polarizing opinions within the community. Proposal #11785 has garnered support from 41.11% of voters, while a significant 57.02% chose to abstain, with a mere 1.73% voting against it. The proposal concerning USTC minting limitations is also embroiled in a fierce contest, with 47.32% in favor and 44.34% against. It’s a tug-of-war, where each vote carries significant weight.

The proposals don’t just represent mere governance changes; they embody the community’s ambitions and its resilience in the face of adversity. Meanwhile, USTC currently trades at a mere $0.012, a long way off from its intended peg to the US dollar. Only time will tell if these proposals can inject the much-needed stability and vitality into the Terra Classic ecosystem.

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