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.
Proposal #11785: Binance Burn Program for USTC
The first proposal, aptly tagged as #11785, primarily focuses on getting Binance to extend its existing fee-burning mechanism to USTC trading pairs. The exchange currently burns 50% of its trading fees from Terra Classic (LUNC) pairs and, if the proposal is accepted, it would be a massive win for the struggling USTC stablecoin. Binance offers trading pairs like USTC/USDT and USTC/BUSD, which collectively saw a trading volume of approximately $5 million in the last 24 hours.
The logic is straightforward: if the most influential crypto exchange burns a portion of the USTC supply, it would likely bolster efforts to re-peg the stablecoin to the US dollar and possibly rejuvenate the value of its counterpart, LUNC.
Proposal #11786: Limiting USTC Minting
Running parallel to the first proposal is another initiative (#11786) aiming to limit the minting of USTC. This is aimed at closing loopholes that facilitate unwarranted expansion in USTC’s supply. Here, the community wants to have a say in any future minting activities, thereby guarding against the arbitrary creation of the stablecoin.
The Voting Landscape
As of now, the proposals have polarized the community. Proposal #11785 has garnered 41.11% favorable votes, while a sizable 57.02% abstained, and a minuscule 1.73% voted against it. The proposal for limiting USTC minting is in a fierce battle as well, with 47.32% in favor and 44.34% against. It’s a tug-of-war, and every vote counts.
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.