Following a decisive vote by the Terra Classic community, an initiative to halt the creation of the previously termed stablecoin, terra usd (commonly referred to as UST or USTC), has been approved. Despite 40.56% opposition, 59.42% of the vote gave the nod for the software update.
Minting Freeze for USTC Approved
USTC, which sits at the 200th spot among 10,000+ crypto assets in the crypto economy, has seen its value jump by 4% in just the last day. As of 1:00 p.m. Eastern Time on September 24, 2023, a single USTC is fetching $0.0127. Flashback to before the Terra ecosystem’s downturn in May 2022: this stablecoin held firm at a solid $1 per unit, maintaining its peg to the USD for a long duration. On May 9, 2022, USTC drifted away from its peg to the U.S. dollar and the peg never returned.
While the Terra blockchain ecosystem shuddered, a community of users and developers continued to persevere. The Terra blockchain is known for facilitating trades between the once-stable coin and LUNA, a dynamic that sent LUNA’s supply skyrocketing into the trillions. The governance motion seeks to terminate the USTC minting process through software adjustments. A noteworthy 59.42% of participants endorsed the motion, aiming to close USTC minting and certain loopholes.
“This proposal would stop all minting and reminting of USTC without the approval of the Terra Classic community,” the proposal notes. “This proposal also stops loopholes such as converting xUST to mint USTC. We pay the Algo Quant team to re-peg USTC to USD, and the Terra Classic community is participating in the burning of the USTC supply, which also facilitates the re-peg.”
The community remains optimistic about re-anchoring USTC to the U.S. dollar, a topic that has been at the forefront of discussions over the past year. “This proposal protects the community and outside investors who are burning USTC helping to achieve the repeg,” the proposal emphasizes. While USTC stands at $0.012 per coin, LUNA‘s valuation is considerably lower. Despite a 5% boost against the dollar, LUNA is exchanged at just $0.00006206 per unit, plummeting 99.99999% from its peak of $119.18.
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