The Terra Classic community has taken a significant step to restore stability by voting to halt all minting and reminting activities associated with TerraUSD Classic (USTC).
This decision is driven by the community’s determination to reestablish a secure peg between USTC and the United States dollar.
In a recent community proposal, the vote results revealed that 59% were in favor of discontinuing the minting of USTC, while approximately 40% opposed this change.
The primary objective behind this move is to protect the interests of both the community members and external investors.
By reducing the supply of USTC, the community aims to facilitate a return to a robust peg with the U.S. dollar.
The backdrop to this crucial decision lies in the events of May 2022 when USTC disengaged from its peg with the U.S. dollar.
This event triggered a catastrophic collapse within the Terra ecosystem, especially affecting Luna Classic (LUNC), which had a close association with USTC.
The value of LUNC plummeted by nearly 100%, triggering a wider downturn in the crypto markets and resulting in an overall loss of approximately $40 billion in total market capitalization.
The proposal to cease minting and reminting activities also involves major crypto exchanges burning USTC.
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This action not only helps restore faith in the Terra ecosystem but also encourages institutions like Binance to initiate the burning of USTC, knowing that the process of minting and reminting has come to an end.
This decision comes in the wake of growing concerns within the Terra Classic community regarding an increase in spam activities, which coincided with the decline in LUNC prices.
It reflects the community’s determination to take proactive measures to ensure the sustainability of the Terra ecosystem.
In another recent development, the Terra Classic community voted on various proposals, including one that sought to raise the minimum deposit requirement from 1 million LUNC to 5 million LUNC.
The outcome of this proposal was resounding, with 93.22% in favor of increasing the minimum deposit requirement amount.
This move is expected to further bolster the stability and integrity of the Terra ecosystem as it continues to evolve and adapt to the dynamic crypto landscape.
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