The Terra Classic community made an important decision in the development of the USTC coin.
The Terra Classic community has decided to stop all activities concerning the minting and reminting of TerraUSD Classic (USTC). This strategic move intends to bring USTC's value back in line with the US dollar.
The community's decision was reached through a voting process, which ended on September 21st, where 59% favored halting USTC minting, while around 40% opposed it.
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The primary aim of this proposal was to protect both community members and outside investors by shrinking the supply of USTC, thus aiding in its repegging to the US dollar.
This action was deemed necessary, especially after USTC lost its peg to the US dollar in May 2022. The fallout was catastrophic for Terra, causing its associated Luna Classic (LUNC) to collapse in value by nearly 100%.
This, in turn, triggered a more considerable slump in the cryptocurrency markets, wiping out close to $40 billion in total market capitalization.
One notable part of the proposal mentions the impact on major cryptocurrency exchanges. It states:
Most importantly, this proposal opens the door for institutions like Binance to start burning USTC knowing that the minting and reminting is over.
Additional reports have highlighted rising concerns within the Terra Classic community about increased spam due to the fall in LUNC prices. Just a few weeks prior, the community had also overwhelmingly voted, with 93.22% in favor, to raise the minimum deposit requirement from 1 million LUNC to 5 million LUNC.
By voting to cease the minting of USTC, the Terra Classic community has made a decisive move to address the instability that has plagued its ecosystem. It remains to be seen how effective this strategy will be in stabilizing USTC and restoring confidence in both the community and the broader cryptocurrency market.
