The price of Terra Classic ($USTC) has surged after its community approved the Terra Classic 11324 proposal to “Re-Peg USTC With LUNC,” which describes a way for the community to help $USTC’s price reattain its peg.
According to the proposal, $USTC having a stable price is critical for the Terra Classic network to “generate meaningful revenue,” and says that reneging stablecoins like USTC sees the community renege “one of its most potentially [sic] methods of making money: algorithmic foreign exchange trading and remittance.”
The proposal reads:
If Terra stablecoins like USTC are not stable, the ability for the LUNC blockchain (Terra Classic) to generate meaningful revenue is extremely limited. Profitability is limited to complex AMM strategies and, primarily, arbitrage (…)This proposal aims to expedite the process slightly using data-driven parameters across any market servicing Terra assets.
The proposal is a “signaling proposal,” which means that it won’t be altering the code just yet, and has the goal of restoring value lost in the May 2022 crash, which saw the then-Terra network collapse, with the network’s main assets becoming nearly worthless in a short amount of time.
After the collapse, the original Terra ecosystem rebranded to Terra Classic, while a new, forked blockchain took the Terra brand with it. When Terra’s ecosystem collapsed, its circulating supply jumped from 340 million tokens to 6.9 trillion, and to combat the inflation $LUNC supporters have added a 1.2% tax burn on all transactions conducted on the network.
After the proposal was approved, $LUNC’s price surged around 25%, before a correction started. The cryptocurrency is at the time of writing up around 11% in the last 24-hour period. Over the same period, the network’s $USTC token, which lost its peg to the U.S. dollar during the collapse, has risen by around 46%.
The price rise was met with a 75% surge in open interest for $LUNC. Open interest, it’s worth noting, represents the number of unsettled derivatives contracts for the asset, and is used to measure how much money is flowing into the market.
Binance has been supporting the network’s token burns, and in its third batch of burns it destroyed 2.5 billion tokens, permanently removing them from circulation in a single transaction. According to information from Binance’s pages, at the time of the burn, the $LUNC tokens were worth nearly $660,000 and were burned as a response to the $LUNC community’s proposal on burning trading fees on-chain.
As reported, the Terra Classic community has been battling for increased adoption and even created a petition to get listed on cryptocurrency exchange Coinbase.
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